Using the modified bond duration of $2\mathrm{.}465$ years, if you anticipate bond yields will increase by $1\mathrm{.}4$ percentage points, then the price of the bond will

decrease by:

$2\mathrm{.}829$ percent

$3\mathrm{.}140$ percent

$3\mathrm{.}451$ percent

$3\mathrm{.}623$ percent

$3\mathrm{.}126$ percent

$3\mathrm{.}262$ percent

Now suppose bond yields increase by $1\mathrm{.}4$ percentage points as expected $($from $10$ percent to $11\mathrm{.}4$ percent$),$ such that the $r$

$3\mathrm{.}398$ percent

$$966\mathrm{.}02.$

$3\mathrm{.}568$ percent

Using the traditional percentage change formula, the new price of the bond reflects a decrease in the price of the bond by

$,$ from

which it can be seen that if an investor relies on modified duration to estimate the percentage change in the price of a bond, they will tend to

$\_$ the price decrease associated with an increase in rates.