Brain Teasers & Mental Math
Interest rates rise. Which bond's price falls more: a 2-year or a 10-year bond (same coupon and credit)?
Model answer
The 10-year bond falls more.
Longer maturity → cash flows further out → higher duration → greater price sensitivity. Rough rule: % price change ≈ −duration × change in yield. A bond with duration ~8…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from Brain Teasers & Mental Math
- You roll one fair six-sided die. What is the probability you roll a number greater than 4?
- Flip a fair coin twice. What is the probability of getting at least one head?
- Draw one card from a standard 52-card deck. What is the probability it is a face card (J, Q, or K)?
- Draw one card from a 52-card deck. What is the probability it is a heart OR a king?
- Roll two fair dice. What is the probability the two dice show the same number (a double)?
- A test for a disease is 99% accurate (99% sensitivity and 99% specificity). The disease affects 1 in 10,000 people. You test positive. What is the probability you actually have it?