单项选择题

A year ago a company issued a bond with a face value of $1000 with an 8 percent coupon. Now the prevailing market yield is 10 percent. What happens to the bond The:（）

A. bond is traded at a market price higher than $1000.
B. bond is traded at a market price less than $1000.
C. company has to issue a new 2 -percent coupon bond.

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单项选择题Which of the following statements about duration is FALSE（）

A. The numerator of the effective duration formula assumes that market rates increase and decrease by the same number of basis points.
B. Effective duration is the exact change in price due to a 100 basis point change in rates.
C. For a specific bond, the effective duration formula results in a value of 8.80%. For a 50 basis point change in yield, the approximate change in price of the bond would be 4.40%.

单项选择题The distinction between modified convexity and effective convexity is that:（）

A. effective convexity accounts for changes in cash flows due to embedded options, while modified convexity does not.
B. modified convexity becomes less accurate as the change in yield increases, but effective convexity corrects for this.
C. modified convexity is only meaningful for positive changes in yield, while effective convexity can be used for either positive or negative changes in yield.