Which of the following is more likely to occur a a 100 basis point drop in yield occurs?

Question

Quizplus · Accepted Answer

A 100 basis point drop in yield will have a larger impact on bond prices when yields are low because the drop represents a larger percentage change in the yield. For example, a 100 basis point drop from a 5% yield is a larger percentage change than a 100 basis point drop from a 10% yield. As a result, the impact on bond prices will be more pronounced when yields are low.

Which of the Following Is More Likely to Occur a A 100