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Question
A bond has a duration of 7.5 years. Its current market price is $1125. Interest rates in the market are 7% today. It has been forecasted that interest rates will rise to 9% over the next couple of weeks. How will this bank's price change in percentage terms?A) This bond's price will rise by 2 percent.
B) This bond's price will fall by 2 percent.
C) This bond's price will not change
D) This bond's price will rise by 14.02 percent
E) This bond's price will fall by 14 .02 percent
Answer
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Related questions
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