You have read in the AFR (12/10/16) that the 30Y 3% coupon AAA-rated Australian government bond had an "extremely attractive yield" of 3.27 and recommended it to your grandparents. Your grandparents invested their lifetime savings into the bond and bought it for AUD 96.50 (face value 100). The duration of the bond is 20 years. Use the formula to calculate the relative price change that will result if the yield increases from 3.27% to 3.3%. Is it likely that you get a bigger or rather smaller X-mas present from your grandparents for you financial advice? X-mas present likely to be small. Rising yields imply falling bond prices and with the long duration of 20, the bond portfolio will drop by some 0.58%. X-mas present likely to be big. Rising yields imply that the grandparents can now earn 3% instead of 3.27%. x-mas present likely to be very big. Rising yields imply rising bond prices and with the long duration of 20, the bond portfolio will rise by some 58%. x-mas present likely to be very small. Rising yields imply falling bond prices and with the long duration of 20, the bond portfolio will drop by some 58%