Statements is correct concerning maculay duration

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Reference no: EM132023028

1. Which one of the following statements is correct?

A. The magnitufe of price increases is greater than that of price decreses for a given absolute change in the yield to maturity.

B. The time to maturity has no effect on the response of a bond's price to a change in the bond's yield to maturity.

C. Bonds prices are directly related to bond yields.

D. Short-term bonds are more interest rate sensitive than long-term bonds.

E. High-coupon bonds are more interest rate sensitive than low-coupon bonds.

2. Which one of the following statements is correct concerning Maculay duration?

A. The duration of a zero coupon bond is equal to one plus the time to maturity.

B. Duration of 20 to 25 years are quite common.

C. The duration of a coupon bond is less than that of a zero coupon bond given equal maturity dates.

D. The duration of a coupon bond is a linear function between the time to maturity and the duration.

Reference no: EM132023028

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