17. A hedge fund currently invests in $100 million of mortgage-backed securities (MBS) that have a duration of 15 and convexity of -500 (negative one hundred). Which of the following is closest to how much money the fund would gain or lose if interest rates decreased by 1%, using the duration+convexity approximation? (a) Gain $11 million (b) Gain $12 million (c) Lose $10 million (d) Lose $12 million (e) Lose $12.5 million 18. Suppose the Hedge fund in 17 financed their $100 million of MBS by using seven-day 17. A hedge fund currently invests in $100 million of mortgage-backed securities (MBS) that have a duration of 15 and convexity of -500 (negative one hundred). Which of the following is closest to how much money the fund would gain or lose if interest rates decreased by 1%, using the duration+convexity approximation? (a) Gain $11 million (b) Gain $12 million (c) Lose $10 million (d) Lose $12 million (e) Lose $12.5 million 18. Suppose the Hedge fund in 17 financed their $100 million of MBS by using seven-day