A bond with duration of 10.0 years has a yield to maturity of 10.0%.This bond's volatility is:
A)9.09%
B)6.80%
C)14.6%
D)10.00%

Name: A bond with duration of 10.0 years has a yield to maturity of 10.0%.This bond's volatility is: A)9.09% B)6.80% C)14.6% D)10.00%
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Question

Quizplus · Accepted Answer

The bond's volatility, also known as modified duration, is calculated by dividing the Macaulay duration by (1 + yield to maturity). Here, it is 10 / (1 + 0.10) = 9.09%.

A Bond with Duration of 10