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Basic Question 14 of 19
Bond prices are more sensitive to a(an) ______ in market yields to maturity than to a(an) ______ in market yields to maturity.
B. increase; decrease
C. no change; increase
A. decrease; increase
B. increase; decrease
C. no change; increase
User Contributed Comments 6
| User | Comment |
|---|---|
| danlan | Duration becomes larger when YTM decreases. |
| toly | If YTM decrease bond price increases and if YTM increase bond price decrease. Remember for a large percentage change in yield, a bond will appreciatie more than it would depreciate(Convexity- draw it out see how the much more price changes as yield drops) |
| erinelize | They try to throw you off by only offering "an" as a choice for the first blank. |
| johntan1979 | Easy if you can picture the graph in your mind. |
| Inaganti6 | anything is easy for you. youre johntan1979 on analystnotes. Legend of all legends! |
| khalifa92 | percentage change in price increase is greater than the percentage change in price decrease ( convexity). |
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Learning Outcome Statements
identify the relationships among a bond's price, coupon rate, maturity, and yield-to-maturity
CFA® 2025 Level I Curriculum, Volume 4, Module 6.