CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

For a non-callable bond, the price change resulting from a 200 bp increase 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
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