Consider a semi-annual coupon bond selling at par with a modified duration of 3.80 half-years and a convexity of 100 half-year-squared. Using the information given, you estimate that upon a 4% increase in its annual yield, the bond price would...

a.

decrease by 7.60% according to the estimation using duration only and decrease by 2.00% according to the estimation using duration and convexity.

b.

None of the options provided.

c.

decrease by 7.60% according to the estimation using duration only and increase by 2.00% according to the estimation using duration and convexity.

d.

decrease by 7.60% according to the estimation using duration only and decrease by 5.60% according to the estimation using duration and convexity

e.

decrease by 7.60% according to the estimation using duration only and increase by 5.60% according to the estimation using duration and convexity.