QUESTION $7$

You own a bond that has a duration of $6$ years. Interest rates are currently $7\%,$ but you believe the Fed is about to increase interest rates by $25$ basis points. Your predicted price change on this bond is $$

$$ A$.+1\mathrm{.}4\%$

B$.-1\mathrm{.}4\%$

C$.-2\mathrm{.}51\%$

D$.2\mathrm{.}51\%$

QUESTION $8$

A put option value $$ in its strike price, and $q,$ in the underline stock price.

A$.$ increases, increases

B$.$ decreases, decreases

C$.$ increases, decreases

D$.$ decreases, increases