Suppose that there is a $30-$year coupon bond today with par value of $$100$ and Macaulay duration of

The coupon rate is unknown. Currently, the bond is traded at $$90$ and the yield curve is flat at

$20\%$ per annum. The yield to maturity is an annualized simple interest rate compounded annually. If

the bond yield increases by $50$ basis points today, what is the percentage change in prices, i$.$e$.,$

change in prices divided by the initial price?

A$.-6\mathrm{.}25\%$

B$.-7\mathrm{.}5\%$

C$.-5\%$

D$.-8\mathrm{.}5\%$

$MD=15$

$y=20\%$

$y=0\mathrm{.}5\%$

E$.$ None of the other answers are correct.