QUESTION 5 Par value bond has a modified duration of 8. Which one...
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Finance
QUESTION 5
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Par value bond has a modified duration of 8. Which one of the following statements regarding the bond is true?
A. If the market yield decreases by 1% the bond's price will decrease by $60.
B. If the market yield increases by 1% the bond's price will increase by $60.
C. If the market yield increases by 1% the bond's price will decrease by $80.
D. If the market yield decreases by 1% the bond's price will increase by $80.
E. If the market yield increases by 1% the bond's price will increase by $70.
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