A 10-year annual coupon bond is currently selling for its par value of $1,000 with an annual yield of 5%. If the bond is callable at par, what is the effective duration of the bond, if the interest rates change by 1%? The price of the bond at a 6% interest rate equals $926.40.
A) 10 years
B) 7.36 years
C) 5.52 years
D) 4.60 years
E) 3.68 years
Correct Answer:
Verified
Q3: Which of the following allows a security's
Q4: Macaulay's duration:
A) is a weighted average of
Q5: Which of the following would generally be
Q6: A 30-year zero coupon bond with a
Q7: Use the following bank information for
Q9: Put the following steps in duration gap
Q10: EVE analysis: is essentially a _ analysis.
A)
Q11: Modified duration:
A) estimates when embedded options will
Q12: Effective duration:
A) estimates when embedded options will
Q13: What does a bank's duration gap measure?
A)
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