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NEW QUESTION: 1
A 15 year bond is trading at par. Its modified duration is 11 years and convexity is 80. Determine the price of the bond following a 10 basis point increase in interest rates
A. $98.90
B. $101.096
C. $101.104
D. $98.904
Answer: D
Explanation:
Explanation
The change in the price of the bond will be equal to $100* (-11*0.1% + 0.5* 80 *(0.1%)