Unit 4.1 DB: Bond Sensitivity

The text discusses 6 features and the impact of the duration (Pp. 516-518) of a bond that affects the sensitivity of its price. Select and analyze one feature or discuss how duration impacts the sensitivity of a bond.

Consider these questions in your answer and reply to your classmates:

Why is the feature a concern?

What does this mean for investors?

Can investors avoid this feature, why or why not?