QUESTIONS 97 THROUGH 108 RELATE TO FIXED INCOME INVESTMENTS.

101. An analyst determined that if interest rates increase 120 basis points the price of a

bond would be $89.70, but if interest rates decrease 120 basis points the price of

that bond would be $99.30. If the initial price of the bond is $95.40, the

approximate percentage price change for a 100 basis point change in yield is closest

to:

A. 2.5%.

B. 4.2%.

C. 8.4%.