We consider bond A whose characteristics are as follows:

Bond A

Coupon 4%

TAB or YTM 4%

Maturity 2

Face value 100

Frequency 2

Sensitivity (- Modified Duration) -1.904

Convexity 462,014

Using modified sensitivity or duration (1st order approximation), estimate the value of bond A for a (-2%) change in market interest rates (YTM).

In the statement, if the change in market interest rates is negative, a - sign is explicitly indicated. In the absence of this sign, the variation is positive.