easy · Certified Financial Planner Retirement
The Fournier family is evaluating a zero-coupon bond with a 10-year maturity.
If interest rates decrease, how will the bond's price change relative to its Macaulay Duration estimate?
- The true price will be lower than the duration estimate
- The price change will be exactly 10% for every 1% change in rates
- The true price will be higher than the duration estimate
- The price will not change because it is a zero-coupon bond
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