- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 6. Fixed-Income Bond Valuation: Prices and Yields
- Subject 3. Relationships between Bond Price and Bond Characteristics
CFA Practice Question
For a non-callable bond, the price change resulting from a 200 bp increase in required yield ______.
B. will be of the same magnitude as the price increase resulting from a 200 bp decrease in required yield
C. will be smaller in magnitude than the price increase resulting from a 200 bp decrease in required yield
A. will be greater in magnitude than the price increase resulting from a 200 bp decrease in required yield
B. will be of the same magnitude as the price increase resulting from a 200 bp decrease in required yield
C. will be smaller in magnitude than the price increase resulting from a 200 bp decrease in required yield
Correct Answer: C
A large basis point change in required yield will cause a larger percentage price increase for the given decrease in required yield than a percentage price decrease for an equal (given) increase in yield.
User Contributed Comments 2
| User | Comment |
|---|---|
| johntan1979 | Positive convexity |
| ibrahim18 | Na wa o |