Mathematics · Bond Valuation
A newly issued 10-year bond has a Modified Duration of 7.2 years. If the bond's Yield-to-Maturity (YTM) decreases by 80 basis points (bps), what is the expected percentage change in the bond's price?
- 1-7.20%
- 2+8.00%
- 3+5.76%✓
- 4-5.76%
Correct answer
+5.76%
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