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American Bankers Association CTFA Exam - Topic 1 Question 69 Discussion

The sensitivity of coupon price to change in its yield:
B) Is inversely related to the bond's yield to maturity
A) Is directly related to the bond's yield
C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
D) Is constant regardless of whether the yield to maturity increases or decreases

American Bankers Association CTFA Exam - 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:

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Suggested Answer: B

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

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Joanna
9 months ago
I thought it was directly related! A seems too simple.
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Cyndy
9 months ago
C sounds right, but I’m not sure about the greater sensitivity part.
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Leila
9 months ago
Wait, is it really constant for all yields? D seems off.
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Angella
10 months ago
Totally agree with B! Makes sense.
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Shonda
10 months ago
B is the correct answer! Inverse relationship.
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Latricia
10 months ago
I recall something about how the price sensitivity varies with yield changes, but I can't remember if it’s greater for increases or decreases. This is tricky!
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Tiera
10 months ago
I practiced a similar question, and I think the sensitivity is not constant, which makes me lean towards option B or C.
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Lucy
10 months ago
I’m not completely sure, but I feel like the sensitivity of coupon prices changes more with increases in yield. Maybe option C?
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Lawanda
11 months ago
I remember studying that bond prices and yields have an inverse relationship, so I think option B might be correct.
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Erick
11 months ago
This seems straightforward to me. The sensitivity of a bond's price to changes in its yield is inversely related to the bond's yield to maturity. That means option B is the correct answer.
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Wei
11 months ago
I'm a bit confused on this one. I know the relationship between bond prices and yields, but I'm not sure if the sensitivity is constant or not. I'll have to review my notes and make an educated guess.
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Abel
11 months ago
Okay, I remember learning that bond prices and yields have an inverse relationship. So the higher the yield, the more sensitive the price will be to changes in that yield. I'll select option B.
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Yolande
11 months ago
I'm pretty confident about this one. The sensitivity of a bond's price to changes in its yield is inversely related to the bond's yield to maturity, so I'll go with option B.
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Kati
11 months ago
Hmm, this is a tricky one. I'm not sure if the sensitivity is greater for increases or decreases in yield to maturity. I'll have to think this through carefully before answering.
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Reuben
11 months ago
Traceroute is the tool that produces this kind of output, I'm confident about that. Now I just need to select the correct answer.
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Joni
11 months ago
I feel like using PL/SQL directly from other applications would go against the best practices of microservices. It just doesn't seem right to me.
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Frankie
11 months ago
I'm a bit confused by the wording of the question. Is it asking about the different types of DAM, or how it's used? I want to make sure I understand the question fully before answering.
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Sheron
1 year ago
Ah, the age-old question of bond price sensitivity. It's all about the derivative, my friends. Just differentiate the bond price with respect to the yield and there's your answer. Simple as pi.
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Xuan
1 year ago
C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
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Odelia
1 year ago
B) Is inversely related to the bond's yield to maturity
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Brigette
1 year ago
C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
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Susy
1 year ago
B) Is inversely related to the bond's yield to maturity
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Maddie
1 year ago
A) Is directly related to the bond's yield
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Edelmira
1 year ago
A) Is directly related to the bond's yield
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Alona
1 year ago
Wait, we're talking about coupons? I thought this was a test on how to maximize my snack budget. Where's the multiple-choice question on whether Doritos or Cheetos are the superior chip?
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Shawna
1 year ago
D can't be right, can it? The sensitivity has to depend on whether the yield is going up or down. Unless the bond market is just a giant game of Calvinball, that is.
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Doretha
1 year ago
D can't be right, can it? The sensitivity has to depend on whether the yield is going up or down.
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Brice
1 year ago
C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
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Jerry
1 year ago
B) Is inversely related to the bond's yield to maturity
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Na
1 year ago
A) Is directly related to the bond's yield
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Kimbery
1 year 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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Magnolia
1 year ago
C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
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Lawrence
1 year ago
A) Is directly related to the bond's yield
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Almeta
1 year ago
I think the sensitivity is greater for increases in yield to maturity than for decreases.
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Glenn
1 year 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
1 year 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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Cathrine
1 year ago
D) Is constant regardless of whether the yield to maturity increases or decreases
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Jeff
1 year ago
C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
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Ronny
1 year ago
B) Is inversely related to the bond's yield to maturity
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Pearlene
1 year ago
A) Is directly related to the bond's yield
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Salome
1 year ago
I disagree, I believe it is inversely related to the bond's yield to maturity.
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Yuonne
1 year ago
I think the sensitivity of coupon price is directly related to the bond's yield.
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