Free preview · 5 questions

Try Bonds Advanced

No sign-up. No timer. Five questions sampled at random from the full 18-question test. See how you stack up before requesting access for the full assessment and a verifiable certificate.

Question 1 of 5

0 of 5 answered

A 5-year bond with $100m face, 5% annual coupon, trades at par. Yields rise to 6%. The bond's new approximate price (using duration of 4.3 years):

$100mRoughly $95.7m — a 4.3% decline from $100m base, calculated as 4.3 × 1% yield rise; or computed exactly by discounting cash flows at 6%, giving roughly the same answer$120m$50m