Asked by
Abhinav Gupta
on Oct 19, 2024
Verified
The duration of a perpetuity varies ________ with interest rates.
A) directly
B) inversely
C) convexly
D) randomly
Perpetuity
A type of annuity that pays an infinite series of cash flows with no end, often used as a model for valuing stocks.
Interest Rates
The price, expressed as a percentage of the principal, that a lender demands from a borrower for the borrowing of assets.
- Understand the relationship between bond duration and interest rates.
Verified Answer
CB
Learning Objectives
- Understand the relationship between bond duration and interest rates.