The price of a 10-year bond can decline by approximately 9, Ask an Expert

Economics

The price of a 10-year bond can decline by approximately 9% if interest rates rise by 1% point. To illustrate this, suppose you own a 10-year U.S. Treasury bond that has a bond rate of 2% per year. How much money will you lose if the value of the bond today is $10,000 (face value of the bond) and the yield increases to 3% within the next few months?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91707602

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