Problem 3-11, Duration Concepts

Principles of Corporate Finance

Brealey, Myers, and Allen

13th Edition

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Evaluate the following statements as true or false:

  1. Long-maturity bonds necessarily have greater durations.
  2. The greater the duration, the lower the bond volatility.
  3. Lower coupon bonds have higher volatility.
  4. An increase in interest rates increases duration.

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  • Search Terms: a also. bond bonds bond’s coupon, duration* duration, durations durations. b. equal, explain. a. false? have higher if interest its longer longer-maturity lower necessarily or other rates rise rise, the things true volatility. c. volatility. d.
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