b. C. A hedge fund is holding a three-year, $10 million face value 6 percent annual coupon bond selling at par. a. What is the impact on the total asset value of the fund of a 1 percent decrease in interest rates? What is the impact of a 75-basis point increase in interest rates on the net asset value of an open-end bond mutual fund holding a seven-year, $100 million face value 7 percent annual bond outstanding? In addition to interest rate risks what is one other risk associated with this type of bond and why?