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Answer: Greater when the market discount rate decreases than when it increases by the same amount.
**Explanation:** For an option-free bond with the same coupon rate and time-to-maturity, the percentage price change is greater (in absolute value) when the market discount rate decreases compared to when it increases. This phenomenon is due to the convexity effect, which causes the bond's price to be more sensitive to decreases in the discount rate. Options A and B are incorrect because they either reverse the relationship or ignore the convexity effect, respectively.
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All else being equal, the absolute value of the percentage price change for an option-free bond is most likely:
A
Less when the market discount rate decreases than when it increases by the same amount.
B
The same whether the market discount rate decreases or increases by the same amount.
C
Greater when the market discount rate decreases than when it increases by the same amount.
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