The interest rate risk of a fixed-rate bond with an embedded call option is best measured by:
举一反三
- The interest rate risk of a fixed-rate bond with an embedded call option is best measured by: A: Effective duration B: Modified duration C: Macaulay duration
- Effective duration is essential to measuring interest rate risk of a bond with an embedded call option because:
- When the interest rate on a bond is ____... rate will _________
- The coupon rate of bond is the interest rate specified in the bond, which is equal to the ratio of the annual interest over the value of bond.
- When the interest rate on a bond is below the equilibrium interest rate, there is excess _________ in the bond market and the interest rate will _________ A: demand; rise B: demand; fall C: supply; fall D: supply; rise