2. May, 2005 #3 A bond will pay a coupon of 100 at the end of each of the next three years and will pay the face value of 1000 at the end of the three-year period. The bond's duration (Macaulay duration) when valued using an annual effective interest rate of 20% is X. Calculate X. (A) 2.61 (B) 2.70 (C) 2.77 (D) 2.89 (E) 3.00