a a a a Suppose a default-free security pays a coupon rate equal to the discount rate annually for T years, and a final return of 100 principal. Show that with a flat curve and a small positive discount rate (less than 5%), the security's effective duration is zero with discrete discounting. Show graphically that with continuous discounting, the security's effective duration is close to zero (e.g. less than a year in absolute value for T 30 for rates between 0% and 10%). - a a a a Suppose a default-free security pays a coupon rate equal to the discount rate annually for T years, and a final return of 100 principal. Show that with a flat curve and a small positive discount rate (less than 5%), the security's effective duration is zero with discrete discounting. Show graphically that with continuous discounting, the security's effective duration is close to zero (e.g. less than a year in absolute value for T 30 for rates between 0% and 10%)