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Question
Based on an 18-month, 8 percent (semiannual) coupon Treasury note selling at par.
If interest rates increase by 20 basis points (i.e., ΔR = 20 basis points), use the duration approximation to determine the approximate price change for the Treasury note.
A. $0.000.
B. $0.2775 per $100 face value.
C. $2.775 per $100 face value.
D. $0.2672 per $100 face value.
E. $2.672 per $100 face value.
Answer
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