3. A bond with 3 years remaining to maturity has an annual coupon rate of 6.40%, and a face value of $1,000. Assume the yield to maturity is 7.10% and answer the questions below. (You may use a financial calculator to get the PV of the bond in this problem - but show your calculator entries, i.e., 1000 FV, etc). a) (8 points) What is the duration of this bond? b) (7 points) If interest rates rise 0.25% from the given YTM, by what percent will the bond change in value? Show this 2 ways as we did in class; (using modified duration and the capital gains formula method)