Q5.

Par value bond has a modified duration of 8. Which one of the following statements regarding the bond is true?

	A.	If the market yield decreases by 1% the bond's price will decrease by $60.
	B.	If the market yield increases by 1% the bond's price will increase by $60.
	C.	If the market yield increases by 1% the bond's price will decrease by $80.
	D.	If the market yield decreases by 1% the bond's price will increase by $80.
	E.	If the market yield increases by 1% the bond's price will increase by $70.