- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 11. Yield-Based Bond Duration Measures and Properties
- Subject 3. Properties of Bond Duration
CFA Practice Question
Bond A is a seven-year, 8% coupon bond. It has a modified duration of 4.2 and a current yield of 6.6%. If the yield were to suddenly decrease to 6.1%, approximately what will be the percentage price change for this bond?
B. 2.1%
C. 4.2%
A. -4.2%
B. 2.1%
C. 4.2%
Correct Answer: B
%ΔP = D(Δr) = (-4.2) x (-0.005) = 2.1%
User Contributed Comments 2
| User | Comment |
|---|---|
| johntan1979 | Anyone else tried to calculate the duration and didn't get 4.2? |
| GBolt93 | I got 5.2 assuming semi annual payments. Though there's not really any point in calculating it since it's given. |