Explanation:

Option D is correct. DV01 (Dollar Value of 01) has several limitations that make it unreliable for large interest rate changes:

1. Linear Assumption: DV01 assumes a linear relationship between bond price changes and yield changes, which breaks down for larger movements due to convexity.

2. Ignores Convexity: DV01 is a first-order approximation that doesn't account for the curvature in the price-yield relationship, making it inaccurate when convexity effects become significant.

3. Small Changes Only: DV01 is designed to measure price sensitivity for small, parallel yield curve shifts (typically 1 basis point). For larger movements, the approximation error increases.

4. Parallel Shift Assumption: DV01 assumes the entire yield curve shifts in parallel, which rarely happens in reality.

For larger interest rate changes, more sophisticated measures like duration with convexity adjustment or full revaluation methods are needed to accurately estimate price changes.