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Consider a bond selling at par with modified duration of 12 years and convexity of 265. A 1% decrease in yield would cause the price
Consider a bond selling at par with modified duration of 12 years and convexity of 265. A 1% decrease in yield would cause the price to increase by 12%, according to the duration rule. What would be the percentage price change according to the duration-with-convexity rule? (In percentage without the percentage sign, use two decimal places)
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