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

Suppose a bonds price is expected to decrease by 3% if its market discount rate increases by 50 bps. If the bonds 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 Please explain your answer?

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