CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Bond prices are more sensitive to a(an) ______ in market yields to maturity than to a(an) ______ in market yields to maturity.

A. decrease; increase
B. increase; decrease
C. no change; increase
Correct Answer: A

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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