SIE practice questioneasyDuration
What does duration measure with respect to a bond?
- AThe bond's coupon rate
- BThe time until maturity
- CA bond's price sensitivity to interest rate changes✓ Correct answer
- DThe total return on investment
Explanation
Why C — A bond's price sensitivity to interest rate changes
Duration measures the sensitivity of a bond's price to changes in interest rates, not maturity, coupon rate, or total return.
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