-If Interest Rates Increase by 20 Basis Points, What Is

Multiple Choice

$$D = \frac { \left[ \frac { 80 } { ( 1.08 ) ^ { 1 } } \times 1 \right] + \left[ \frac { 80 } { ( 1.08 ) ^ { 2 } } \times 2 \right] \left[ \frac { 80 } { ( 1.08 ) ^ { 3 } } \times 3 \right] \left[ \frac { 80 } { ( 1.08 ) ^ { 4 } } \times 4 \right] \left[ \frac { 80 + 1,000 } { ( 1.08 ) ^ { 5 } } \times 5 \right] } { 1,000 } = 4.312$$
-If interest rates increase by 20 basis points, what is the approximate change in the market price using the duration approximation?

A) -$7.985
B) -$7.941
C) -$3.990
D) +$3.990
E) +$7.949