In a rising interest rate environment, the difference in effective duration between a callable bond and a non-callable bond would most likely: increase. decrease. remain unchanged We have learned that as interest rates rise the price of a bond falls for both callable and non ...
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Which of the following statements regarding Macaulay duration is correct? For a given coupon rate, Macaulay duration can be lower for a long-term discount bond than for a short-term discount bond. For a given time to maturity and yield to maturity, Macaulay ...
In case of (Delta YTM) why use decimal figures instead of % say if the sum says 100bp shock why we use 0.01 insted of 1%. Please explain. i have forgot the reason of it, and not finding the exact time ...
Which of the following conditions is not required for the realized horizon yield to equal the original yield to maturity on an option-free, fixed-coupon bond? The coupon payments are reinvested at the same interest rate as the original yield to maturity. The bond is ...
I got the point that bond price rises at a higher rate and decrease at a lower rate when interest rate changes. But what is the meaning of convexity in FI R&R chapter? Is the shift of duration from tangent to the ...
The following table shows selected data from a company’s cash flow statement: 2018 Net income $516 Depreciation $88 Amortization $66 Change in working capital –$44 Additions to property and equipment –$62 Proceeds from the sale of property and equipment $8 The company’s free ...