A. positive duration
B. positive discount
C. negative discount
D. negative duration
✅ The correct answer is option A.
Direct relationship between price change and interest rate change is represented by positive duration. The name for a particular relationship between changes in the price of a debt security and changes in prevailing interest rates. When a security has positive duration, its price increases in response to a decrease in prevailing market rates. Almost all securities have positive duration.
Direct relationship between price change and interest rate change is represented by positive duration. The name for a particular relationship between changes in the price of a debt security and changes in prevailing interest rates. When a security has positive duration, its price increases in response to a decrease in prevailing market rates. Almost all securities have positive duration.