The volatility of a bond is given by:
I.Duration/(1 + yield)
II.Slope of the curve relating the bond price to the interest rate
III.Yield to maturity
A)I only
B)II only
C)III only
D)I and II only

Question

Quizplus · Accepted Answer

Volatility of a bond is often measured by its duration, which is adjusted by dividing by (1 + yield). Additionally, the slope of the curve relating bond price to interest rate changes (duration) also indicates volatility. Yield to maturity is not a direct measure of volatility.

The Volatility of a Bond Is Given By