A 6% annual coupon bond with a $1,000 par value has a yield to maturity of 7.5%. This bond has a duration of 7.45 years. If the market interest rate goes up by 20 basis points,

what impact will it have on the price of this bond?

Select one:

The bond price will increase by 2.04%

The bond price will decrease by 1.39%

The bond price will increase by 1.39%

The bond price will remain unchanged

The bond price will decrease by 2.04%