Steel Pier Company has issued bonds that pay semiannually with the following characteristics:
If the bond's coupon was smaller than 10%, the modified duration would be _____ compared to the original modified duration.
A. larger
B. unchanged
C. smaller
D. The answer cannot be determined from the information given.
Answer: A
If the maturity of the bond was less than 10 years, the modified duration would be _____ compared to the original modified duration.
A. larger
B. unchanged
C. smaller
D. The answer cannot be determined from the information given.
Answer: C