For a change in a bond's yield to maturity, the absolute magnitude in the change of the bond's price is ________ related to the bond's coupon rate.

Question

Quizplus · Accepted Answer

The absolute magnitude of the change in a bond's price due to a change in yield to maturity is inversely related to the bond's coupon rate. This means that as the coupon rate of the bond increases, the magnitude of the change in the bond's price due to a change in yield to maturity decreases. Conversely, as the coupon rate of the bond decreases, the magnitude of the change in the bond's price due to a change in yield to maturity increases.

For a Change in a Bond's Yield to Maturity, the Absolute