"- The change that occur in the price of a bond (volatility) given a change in yield is because of time to maturity and coupon - Holding maturity constant a decrease in interest rates will raise bond prices on a percentage basis more than a corresponding increase in rates will lower bond prices. - Given the changes in market yields changes in bond prices are directly related to time to maturity. - The percentage price change that occurs at a result of the direct relationship between a bond’s maturity and its price volatility at a diminishing rate as the time to maturity increases. - Other things being equal bond price fluctuations and bond coupon rates are inversely related. Source: http://in.docsity.com/en-docs/Bond_Price_Volatility_-_Security_Analysis_and_Portfolio_Management_-_Solved_Quiz_"
Add a comment
to see other 3 answers