🏦LTB
SIE: Debt Securities
SIE practice questioneasyDuration

What does duration measure with respect to a bond?

  1. AThe bond's coupon rate
  2. BThe time until maturity
  3. CA bond's price sensitivity to interest rate changes✓ Correct answer
  4. DThe total return on investment
Explanation

Why CA 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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