A bond with duration of 10 years has yield to maturity of 10%. This bond's volatility is:
A) 9.09%
B) 6.8%
C) 14.6%
D) 6.0%

Name: A bond with duration of 10 years has yield to maturity of 10%. This bond's volatility is: A) 9.09% B) 6.8% C) 14.6% D) 6.0%
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Question

Quizplus · Accepted Answer

The bond's volatility can be approximated by the formula: Volatility = Duration / (1 + Yield). Here, Volatility = 10 / (1 + 0.10) = 9.09%.

A Bond with Duration of 10 Years Has Yield to Maturity