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NEW QUESTION: 1
Martina Profis runs a fixed-income portfolio for the pension fund of Whether by Whittaker, Ltd. The portfolio contains a $12 million position in the corporate bonds of Dewey Treadmills. Profis is concerned that interest rates are likely to rise and has calculated that a 50-basis point increase in rates would cause a 4% decline in the Dewey bonds. The dollar duration of the position in Dewey Treadmills is closest to:
A. $480,000
B. $96,000
C. $960,000.
Answer: C