An investor buys a bond that has a coupon rate of 4% with semiannual payments and remaining maturity of exactly 20 years. The investor pays a price for the bond that reflects a yield of maturity of 5.25%. Exactly one year later, the investor sells the bond for 95% of par value. Over the year, the bonds yield to maturity:

declined by 86 basis points.

declined by 306 basis points.

increased by 86 basis points.

increased by 306 basis points.