Watson Thrift Association reports an average asset duration of 7 years, an average liability duration of 3.25 years. In its latest financial report, the association recorded total assets of $1.8 billion and total liabilities of $1.5 billion. If interest rates began at 6 percent and then suddenly climbed to 7.5 percent, what change (in percentage terms) wills this bond’s price experience if market interest rates change as anticipated?
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