2. A newly issued bond paying an annual coupon has the following characteristics. Coupon 8% YTM 8% Maturity 15 years Macaulay's Duration 9.245 years a. Calculate modified duration using the information above. b. Explain why modified duration is a better measure than maturity when calculating the bond's sensitivity to changes in interest rates. c. Identify the direction of change in modified duration if: i. The coupon of the bond were 14%, not 8%. ii. The maturity of the bond were 17 years, not 15 years.