Question $14$

$7\mathrm{.}2pts$

A bond for the Japstown Corporation has the following characteristics:

Coupon rate $---6\mathrm{.}00$ percent, paid annually

Yield to maturity $---5\mathrm{.}50$ percent

MaCaulay duration $---8\mathrm{.}80$ years

Convexity $---92\mathrm{.}8$

Noncallable

If the yield to maturity of this bond increases by $75$ basis points $(0\mathrm{.}75\%),$ what will be the percentage change in the bond's price if you include the convexity effect in your calculations?

$-5\mathrm{.}99\%$

$-6\mathrm{.}52\%$

$-6\mathrm{.}26\%$

$+6\mathrm{.}52\%$

$+5\mathrm{.}87\%$