Question: We have two fixed income bonds. Bond A has a duration of five years and Bond B has a duration of 7 years. The Federal

We have two fixed income bonds. Bond A has a duration of five years and Bond B has a duration of 7 years. The Federal Reserve has increased rates by 400 basis points. Which option is true?
The value of bond A will change more than the value of bond B.
The value of bond A will change less than the value of bond B.
The values of bonds will change by approximately the same amount.
Nothing definite can be said about the changes.

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