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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:

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Suggested Answer: B

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

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Sheron
1 months 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
10 days ago
C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
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Odelia
17 days ago
B) Is inversely related to the bond's yield to maturity
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Brigette
18 days ago
C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
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Susy
22 days ago
B) Is inversely related to the bond's yield to maturity
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Maddie
27 days ago
A) Is directly related to the bond's yield
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Edelmira
1 months ago
A) Is directly related to the bond's yield
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Alona
2 months 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
2 months 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
22 days 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 months 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 months ago
B) Is inversely related to the bond's yield to maturity
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Na
1 months ago
A) Is directly related to the bond's yield
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Kimbery
2 months 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 months 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 months ago
A) Is directly related to the bond's yield
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Almeta
2 months ago
I think the sensitivity is greater for increases in yield to maturity than for decreases.
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Glenn
2 months 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
2 months 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
7 days ago
D) Is constant regardless of whether the yield to maturity increases or decreases
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Jeff
9 days ago
C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
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Ronny
11 days ago
B) Is inversely related to the bond's yield to maturity
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Pearlene
27 days ago
A) Is directly related to the bond's yield
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Salome
2 months ago
I disagree, I believe it is inversely related to the bond's yield to maturity.
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Yuonne
2 months ago
I think the sensitivity of coupon price is directly related to the bond's yield.
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