A bond has a duration of 2.74, and the YTM for similar bonds is 8%, what is the bond's modified duration, and approximate percentage change in price for the bond if rates rise by 1%?
A) Modified duration of 3, and approximate change of -3%
B) Modified duration of 2.74, and approximate change of -2.74%
C) Modified duration of 2.49, and approximate change of -2.49%
D) Modified duration of 2.54 and approximate change of -2.54%
Correct Answer:
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