For a 10-year floating-rate security if market in
For a 10-year floating-rate security, if market interest rates change by 1%, the change in the value of the security willmost likely be:
A.zero.
B.related to the security’s coupon reset frequency.
C.similar to an otherwise identical fixed-rate security.
参考解答
413***102
2024-11-14 22:23:37
Ans:B;
B is correct. Change in the value of the security corresponding to a 1% change in market interest rates is termed as duration. The problem is asking for the duration of a 10-year floating-rate security. The duration of a floating-rate security is equal to the fraction of a year until the next reset date, therefore related to the security’s coupon reset frequency.
相似问题
An investment banking firm offers a corporation a
An investment banking firm offers a corporation a binding bid to purchase an amount of new debt securities to be issued by
A 10-year bond is issued on January 1 2010. Its c
A 10-year bond is issued on January 1, 2010 Its contract requires that its coupon rate change over time as shown in the
A moral obligation bond is also known as:A. a gene
A moral obligation bond is also known as:A a general obligation debt B a prerefunded bond C an appropriation-backed obligation
An analyst is evaluating various debt securities i
An analyst is evaluating various debt securities issued by a company The type ofsecurity that is most likely to yield the lowest recovery in a bankruptcy is a:A debenture bond B collateral trust bond C mortgage bond
All U.S. Treasury coupon strips are:A. zero-coupon
All U S Treasury coupon strips are:A zero-coupon securities B issued directly by the U S Treasury C created from pooled coupon payments of U S Treasury securities
