Reading # 21: (LOS 21.h)
In the Schweser Example, an adjustment of Dollar Duration (DD) was shown for an overall Increase of Interest Rates. In this case, I have noticed that Duration of each of the four bonds Increased as well and their market values have Decreased.
My question is : what happens to Duration, and Adjustment of DD if interest rates Decrease after one year.
Thank you in advance.
In the Schweser Example, an adjustment of Dollar Duration (DD) was shown for an overall Increase of Interest Rates. In this case, I have noticed that Duration of each of the four bonds Increased as well and their market values have Decreased.
My question is : what happens to Duration, and Adjustment of DD if interest rates Decrease after one year.
Thank you in advance.