Question #83
Reading: Reading 27 Valuation and Analysis of Bonds With Embedded Options - Anwers
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Question
A CFA charter holder observes a 12-year 7 ¾ percent semiannual coupon bond trading at 102.9525. If interest rates rise immediately by 50 basis points the bond will sell for 99.0409. If interest rates fall immediately by 50 basis points the bond will sell for 107.0719. What are the bond's effective duration (E
Answer Choices:
A. ED = 7.801, EC = 80.73
B. ED = 8.031, EC = 2445.120
C. ED = 40.368, EC = 7.801
No explanation available for this question.