For small change in interest rates, market prices of bonds move in an inversely proportional manner according to the size of the:
A)equity
B)asset value
C)liability value
D)duration value

Question

Quizplus · Accepted Answer

The size of duration value determines the sensitivity of a bond's price to changes in interest rates. The longer the duration, the greater the price change for a given change in interest rates. Therefore, a small change in interest rates will result in a larger price change for bonds with longer duration values.

For Small Change in Interest Rates, Market Prices of Bonds