As a bond researcher, you build a new model for estimating % change in Bond Price for small changes in interest rates. Your model is as follows %change in Bond Price = (-1*Modified Duration * change in interest rate) + (0.5*Convexity*(change in interest rate)2), According to your model, what is the %change in Bond Price if the interest rates went up by 2%, the modified duration is 11.26 years and the Convexity is 212.4
A) -18.27% B) +18.27% C) -22.52% D) +22.52%