For large interest rate declines, duration ___________ the increases in the bond's price, and for large interest rate decreases, it ____________ the decline in the bond's price.

Question

Quizplus · Accepted Answer

Duration overpredicts the increases in the bond's price for large interest rate declines and underpredicts the decline in the bond's price for large interest rate decreases.

For Large Interest Rate Declines, Duration ___________ the Increases in the Bond's