An investor is considering purchasing a Treasury note with $1,000 par value, a 2-year maturity, a 5.5 percent coupon, an

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An investor is considering purchasing a Treasury note with
$1,000 par value, a 2-year maturity, a 5.5 percent coupon, and a 7
percent required rate of return. The bond pays interest
semiannually.
If annual promised yields decrease 30 basis points
immediately after the purchase, what is the predicted price change
in percentage and dollars terms based on the bond’s duration? Is
the predicted price change based on the duration model larger or
smaller than the actual price change would be? Please explain
briefly why.