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
A: Effective duration
B: Modified duration
C: Macaulay duration
举一反三
- The interest rate risk of a fixed-rate bond with an embedded call option is best measured by:
- Effective duration is essential to measuring interest rate risk of a bond with an embedded call option because:
- Increasing duration implies that interest - rate risk has increased.
- The duration of a ten - year, 10 percent coupon bond when the interest rate is 10 percent is 6.76 years. What happens to the price of the bond if the interest rate falls to 8 percent?
- A bond has a modified duration of 6 and a convexity of 62.5. What happens to the bond's price if interest rates rise 25 basis points It goes:（） A: down 1.46%. B: up 4.00%. C: up 1.46%.