General Studies · Bond Price Volatility
Which feature of a bond represents the largest portion of the bond's total value and is therefore the single most important factor determining its Duration and Bond Price Volatility?
- 1The embedded Optionality in Bonds (Call/Put).
- 2The Coupon Rate.
- 3The Face Value repayment at maturity.✓
- 4The frequency of coupon payment (annual vs. semi-annual).
Correct answer
The Face Value repayment at maturity.
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