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D. Categorize
Answer: A
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If a bond has a modified duration of 7 and convexity of 100 and interest rates fall 1 percent, what will happen to the price of the bond?
A. Rise 6.5%.
B. Rise 7.5%.
C. Fall 7.5%.
D. Fall 6.5%.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
ꢀV = -(7) (.01) + 1/2 (100) (.01)2.
NEW QUESTION: 3
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