Which of the following statements BEST describe a bond's duration if all other factors remain constant?<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
A. The shorter the duration the higher the interest rate risk of the bond
B. The longer the duration the lower the volatility of prices of the bond
C. The higher the duration the higher the default risk of the bond
D. The lower the coupon rate the greater the bond's duration
Answer:D
Which of the following statements BEST describe a bond's duration if all other factors remain constant?<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
A. The shorter the duration the higher the interest rate risk of the bond B. The longer the duration the lower the volatility of prices of the bond C. The higher the duration the higher the default risk of the bond D. The lower the coupon rate the greater the bond's duration