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CFA Level 1 Question of the Week - Fixed Income

Matt_AnalystPrepMatt_AnalystPrep MontrealPosts: 141 Associate
edited October 2017 in Level 1 Questions

A bond valued at $200,000 has a duration of 8 and a convexity of 20. Assuming that the bond's spread relative to the benchmark curve increases by 25 basis points due to a credit downgrade, then the approximate change in the bond's market value is closest to:

CFA Level 1 Question of the Week - Fixed Income 6 votes

A. $3,988
83% 5 votes
B. $3,960
16% 1 vote
C. $3,970
0% 0 votes
Tez4715

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