Using the modified bond duration of $2\mathrm{.}487$ years, if you anticipate bond yields will decrease by $1\mathrm{.}4$ percentage points, then the price of the bond will increase by:

$2\mathrm{.}855$ percent

$3\mathrm{.}168$ percent

$3\mathrm{.}482$ percent

$3\mathrm{.}795$ percent

Now suppose bond yields decrease by $1\mathrm{.}4$ percentage points as expected $($from $10$ percent to $11\mathrm{.}4$ percent$),$ such that the new price of the bond will be $$966\mathrm{.}02.$

Using the traditional percentage change formula, the new price of the bond reflects an increase in the price of the bond by $,$ from which it can be seen that if an investor relies on modified duration to estimate the percentage change in the price of a bond, they will tend to $$the price increase associated with a decrease in rates.