Question: C. Suppose a bond's price is expected to decrease by 3% if its market discount rate increases by 50 bps. If the bond's market discount

C. Suppose a bond's price is expected to decrease by 3%

C. Suppose a bond's price is expected to decrease by 3% if its market discount rate increases by 50 bps. If the bond's market discount rate decreases by 50 bps, the bond price is most likely to change by: 1) 3% 2) Less than 3% 3) More than 3% What is the best terminology to describe this pattern (use terminology covered in this unit)? Please explain your answer. [4 Marks]

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