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Determine interest rate sensitivity

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Reference no: EM133120035

Suppose you have the following bond:

Par Value:

$1,000.00

Price:

$1,105.90

Coupon

3.775%/period

YTM:

2.9105%/period

Duration:

11.906 periods

 

 

According to duration, how much is the price predicted to change if the yield to maturity goes down by 0.25% per period?

Rise by $31.99.

Fall by $28.92.

The current price, not the par value, determines interest rate sensitivity. (Also, check the sign.)

Fall by $31.99.

Rise by $28.92.

Fall by $3,198.62.

Reference no: EM133120035

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