Is CFA difficult than CA?

Volatility means that something has the characteristics of changing quickly and without notice. It usually happens for the worse. There are different types of bonds that can be purchased. In a sense these US bonds means that you have lent money to the US government that will be paid back in years to come with interest.

This money is used to help the U.S. government with their needs. There are different types of bonds. It was first created in the mid-1930s. First, you must figure out the amount of money you would like to spend. If it is a $500 bond with a 10 year and ten percent coupon, then you could get $50 every year after it matures in ten years. However, it has the greatest volatility.

The answer to this is letter B, 10-year, 10% coupon. This would take 10 years before it would mature and the percentage of return is lower as compared to the other option which will also take 10-years but with a 15% coupon. The other option may be chosen by other people as the years that it will take to mature is much shorter.

It will not be as volatile as option B. In real life, investors will find it hard to avoid volatility because there are times when it occurs randomly. It should be remembered that the volatile market may sometimes provide great rewards. Timing and chance may play huge roles on this.

10-year, 10% coupon-this question is asking: given a change in yield, which of the bonds will exhibit the greatest price change? of the four choices, the bond with the longest maturity and lowest coupon will have the greatest price volatility.all else equal, the bond with the longer term to maturity is more sensitive to changes in interest rates. cash flows that are further into the future are discounted more than near-term cash flows. here, this means that one of the 10-year bonds will have the highest volatility. similar reasoning applies to the coupon rate. a lower coupon bond delivers more of its total cash flow (the bonds par value) at maturity than a higher coupon bond. all else equal, a bond with a lower coupon than another will exhibit greater price volatility. here, this means that of the 10-year bonds, the one with the 10% coupon rate will exhibit greater price volatility than the bond with the 15% coupon.