Impact of Duration on Bond Price Sensitivity

Duration is a crucial concept in fixed income investing, representing the sensitivity of a bond's price to changes in interest rates. The effective duration of a bond is particularly significant as it considers the bond's cash flow changes due to changes in yield. An investor is evaluating two bonds: Bond A has a modified duration of 5 years, while Bond B has a modified duration of 7 years. If interest rates increase by 1%, which bond is expected to experience a larger price decline?