Multiple choice

1. A bond with a face value of $1,000 has coupon rate of 7%, yield to maturity of 10%, and twenty years to maturity. The bond's duration is:  

a. 10.0 years 

b. 7.4 years 

c. 20.0 years 

d. 12.6 years 

2. A bond with has face value of $1,000, coupon rate of 0%, yield to maturity of 9%, and ten years to maturity. This bond's duration is:  

a. 6.7 years 

b. 7.5 years 

c. 9.6 years 

d. 10.0 years 

3. 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% 

4. A bond with duration of 5.7 years has yield to maturity of 9%. The bond's volatility is:  

a. 1.9 % 

b. 5.2 % 

c. 5.7 % 

d. 9.0 %