Using the modified bond duration of 2.443 years, if you anticipate bond yields will increase by 1.4 percentage points, then the price of the bond will decrease by: 3.112 percent 3.420 percent 3.591 percent 3.728 percent Now suppose bond yielde increase by 1.4 percentage points as expected (from 10 percent to 11.4 percent), such that the new price of the bond will be $966.02. from Using the traditional percentage change formula, the new price of the band reflects a decrease in the price of the bond by 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 wil tend to the price decrease associated with an increase in rates