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"Bond price change is measured as the percentage change in the price of the bond Where: EPB = the ending price of the bond BPB = the beginning price of the bond Determinants of Price Volatility for Bonds: Par value, Coupon, Years to maturity, prevailing market interest rate. Source: http://in.docsity.com/en-docs/Bond_Price_Volatility_-_Security_Analysis_and_Portfolio_Management_-_Solved_Quiz_"

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"The fundamental change in price is that which causes yields to increase as price decreases and vice versa. This relationship is not linear, however, it is convex. There are four properties concerning the price volatility of an option free bond: 1. Price moves in the opposite direction of a change in yields, but the percentage change is not the same for all bonds. 2. For small changes in yields, the percentage change is roughly the same no matter what direction rates move. 3. For large changes in yields, the percentage price change is not the same for an increase in yield as it is for a decrease in yield 4. For a given large change in yield, the percentage price increase is greater than the percentage price decrease. "

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