a. Use a spreadsheet to calculate the durations of the two bonds in Spreadsheet 16.1 if the annual interest rate increases to 12%. Why does the duration of the coupon bond fall while that of the zero remains unchanged? (Hint: Examine what happens to the weights computed in column F.)

b. Use the same spreadsheet to calculate the duration of the coupon bond if the coupon is 12%

instead of 8% and the semiannual interest rate is again 5%. Explain why duration is lower than in Spreadsheet 16.1. (Again, start by looking at column F.)