Question: Using duration and convexity approximation, compute the percentage price change on a 10-year fixed coupon bond, if the interest rate increases by 1%. The modified

Using duration and convexity approximation, compute the percentage price change on a 10-year fixed coupon bond, if the interest rate increases by 1%. The modified duration of the bond is 6 years, and convexity is 200 year2.

Group of answer choices

-6%

-5%

-7%

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