An analyst does research about bond price and gathers the following information about a callable bond:
Par value | $1000000 |
Current market value | $923686 |
Effective duration | 3.5 |
Modified duration | 3.1 |
If yields are expected to increase by 125 basis points, the expected price change for the bond is closest to:()
A. -$35793
B. -$40411
C. -$4,3750