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A company issued an 8 % bond with 3 years to maturity. The yield to maturity is 8 % and the bond pays semi -

A company issued an

8 %

bond with

3

years to maturity. The yield to maturity is

8 %

and the bond pays semi

-

annual coupons. What is the Macaulay duration? What is the Modified Duration?

Please explain the figure and show all equations and calculations used.

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