Impact of Interest Rate Rise on Bond Price

Consider a 5-year bond with a face value of $1,000 that pays a 6% coupon rate annually. The bond currently has a yield to maturity (YTM) of 4%. Based on the bond's cash flows and interest rates, investors often evaluate the bond's duration and convexity to assess its price sensitivity to interest rate changes.

If interest rates rise by 1%, what will happen to the bond's price based on its duration? Remember, duration measures the bond's price sensitivity to small changes in interest rates, while convexity accounts for the curvature in the price-yield relationship.