2. HUHITLE 5Cule Glldll SIM years the spot rates are virtually the same for each maturity. There is simply no expectations theory that would explain that type of shape for the term structure of interest rates. Is this market simply unstable?" (10 Marks) Question 3 A bond has an annual modified duration of 7.020 and annual convexity of 65.180. If the bond's yield-to-maturity decreases by 25 basis points what will be the expected percentage price change? (20 Marks)