7. A three year bond pays semiannually $3 ($6 per year) is trading at 98.50 and has a par value of 100. Find the Macaulay and modified duration. (4 points) 8. One strategy that is used to hedge interest rate risk is to match the modified duration of assets and liabilities. If we hedge the above bond in question 7 with a zero coupon bond, what would be the maturity of said zero. (2 points)