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3a) Calculate the Macaulay Duration of a 6% annual coupon bond with a face value of a 1000 and three years to maturity. Assume that

3a) Calculate the Macaulay Duration of a 6% annual coupon bond with a face value of a 1000 and three years to maturity. Assume that all market interest rates are 7%

b) The interest rates now drops to 6.75%. Work out the EXPECTED price change, and then the ACTUAL price change.

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