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Steel Pier Company has issued bonds that pay semiannually with the following character: Coupon: 10% Yield to Maturity: 10% Maturity: 10 years Macaulay Duration: 6.76

Steel Pier Company has issued bonds that pay semiannually with the following character:

Coupon: 10%

Yield to Maturity: 10%

Maturity: 10 years

Macaulay Duration: 6.76 years

If the yield to maturity decreases to 8.045%, the expected percentage change in the price of the bond using modified duration would be ________.

A) 12% B) 11% C) 10% D) 13%

Answer: 12%

Please explain

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