American Bankers Association Exam CTFA Topic 1 Question 69 Discussion

Actual exam question for American Bankers Association's CTFA exam

Question #: 69
Topic #: 1

[All CTFA Questions]

The sensitivity of coupon price to change in its yield:

AIs directly related to the bond's yield

BIs inversely related to the bond's yield to maturity

CIs greater for increases in yield to maturity than it is for decreases in yield to maturity

DIs constant regardless of whether the yield to maturity increases or decreases

Show Suggested Answer

Suggested Answer: B

by Carin at Jul 03, 2024, 11:00 PM

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Kimbery

4 hours ago

C seems like the correct answer to me. The sensitivity is greater for increases in yield to maturity than for decreases. It's like the bond market is more sensitive to bad news than good news. Go figure!

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Almeta

3 days ago

I think the sensitivity is greater for increases in yield to maturity than for decreases.

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Glenn

5 days ago

Hmm, I'm not sure about this one. I'll have to think it through a bit more. Maybe I should have studied bond pricing formulas a little harder.

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Golda

6 days ago

I think the answer is B. The sensitivity of the coupon price is inversely related to the bond's yield to maturity. This makes sense because as the yield increases, the price of the bond decreases.

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Salome

7 days ago

I disagree, I believe it is inversely related to the bond's yield to maturity.

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Yuonne

11 days ago

I think the sensitivity of coupon price is directly related to the bond's yield.

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