47. A Wall Street Journal article titled Greeces New Leaders Act Swiftly to Reverse Austerity was published January 28, 2015. It included the following paragraph: The moves scuttled the expectations of some European officials that Greeces new leadership would retreat from its radical campaign platform after attaining power. Greek stocks plummeted more than 9%, with the countrys four main banks falling more than 25%. The yield on two-year debt rose by 2.63 percentage pointsan enormous move by bond-market standardsto 16.5% as Greek bond prices tumbled. The two-year bonds referenced have a coupon rate of 6.40%. Assume the bonds mature on June 15, 2017 and today is June 15, 2015 so accrued interest can be ignored. However, Eurobonds pay interest annually. When the yield increased, investors in the bonds would have experienced a:

1. Capital Loss of 1.90%
2. Capital Loss of 4.32%
3. Capital Loss of 7.62%
4. Capital Loss of 18.96%
5. Capital Loss of 41.09%

48. After the yield increased to 16.5%, the Effective Duration of the Greek bonds referenced in question 47 is:

a. 0.3.

b. 1.0.

c. 1.4.

d. 1.7.

e. 3.3.