32. The Modified Duration is equal to:

33. If the yield to maturity decreases by y =35 bp = 0.35% then according to the duration approximation, the price of the bond will change to:

New P = $ .

Use the following information to answer questions 24-33. A 5-year 5% annual coupon bond yields 4%. Compute the Macaulay duration of the bond. Do this by filling in the following table. Do not round - keep many decimals so that your duration should be accurate to 4 decimals. (1) (2) (3) (4) (5) Time Until Payment Payment payment (Years) Weight = (3) / Sum(3) Column (1) Column (4) Discntd at 4% 1 50 #24 2 50 #25 3 50 #26 #27 4 50 #28 5 1050 #29 Column Sum: 1.0000 Sum of Col 3, Price = $ #30 Sum of Col 5, Duration = #31 years ModD = D (1 + y)