Sản phẩm & Rủi roCâu 43 / 398
Duration is a measure that helps investors estimate:
a.A bond's credit rating
b.The issuer's likelihood of default
c.How sensitive a bond's price is to changes in interest rates
d.The amount of accrued interest owed at settlement
Giải thích
Duration estimates the percentage change in a bond's price for a given change in interest rates, so higher duration means greater interest-rate sensitivity. It does not measure credit rating, default probability, or accrued interest.
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Câu hỏi liên quan cùng chủ đề
- Two bonds are identical except for maturity. Which bond's price will generally change MORE for a given change in interest rates?
- An investor buys a bond at par with a 4% coupon. If market rates later drop to 2%, the market value of the investor's bond will most likely:
- Nominal yield on a bond refers to:
- Which of the following bond ratings represents the LOWEST credit risk?
- The line between 'investment grade' and 'non-investment grade' (high-yield) bonds generally falls at:
- If a rating agency downgrades a company's bonds, the most likely immediate effect on those existing bonds is that their:
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