Answer: 93.7

The correct answer is **A (93.7)**. The percentage change in the bond's price is calculated using the formula: \[ \%\Delta P = -\text{Modified Duration} \times \Delta Y + \frac{1}{2} \times \text{Convexity} \times (\Delta Y)^2 \] Substituting the given values: \[ \%\Delta P = -6.9 \times 0.0075 + \frac{1}{2} \times (-212) \times (0.0075)^2 \] \[ \%\Delta P = -0.05175 - 0.0059625 = -0.0577125 \] This results in a price decline of approximately **5.77%**. The new bond price is: \[ 99.4 \times (1 - 0.0577125) = 93.6634 \] Rounded to **93.7**, which matches option **A**. **Option B (94.3)** is incorrect because it uses par value (100) instead of the given bond price (99.4). **Option C (94.9)** is incorrect because it incorrectly treats convexity as a positive value, leading to an inaccurate price adjustment.

Author: LeetQuiz Editorial Team