2. (35pt) There is a 3-year annual coupon bond (face value =$100 ) with coupon rate at 5% and the market price of the bond is $100. a. Use the approximation formula to show the yield to maturity of the bond is about 5%. b. Calculate the Macaulay's duration and Modified duration c. Calculate the Convexity d. With a 1% fall in yield-to-maturity, by what percent will the bond price change