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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).

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). How much money the fund would gain or lose if interest rates decreased by 1%, using the duration+convexity approximation?

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