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Your feed Income broker has suggested a bond to be added to your existing bond portfolio a 6.5% coupon 27-yr final with annual pay trading

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Your feed Income broker has suggested a bond to be added to your existing bond portfolio a 6.5% coupon 27-yr final with annual pay trading at 5% All bonds that are recommended for purchase are subject to sensitivity analysis. To determine the potential change in price of a 200 bps increase in rates, you are provided the following information: Modified duration=13.9136 Convexity - 285.48 A. The current price of the bond is 1 Select B. If rates increase by 200 bps, the new price of the bond will be select reflecting a percentage change of Select C. The DURATION ONLY APPROACH would anticipate A PRICE CHANGE OF Stect! D. The DURATION CONVEXITY APPROACH would anticipate A PRICE CHANGE OF Select E The Select approach provides a better indication of the expected change in price of Select 1 in rates

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