(a) The following table shows the annual cash flow of a security that will mature in three years. The current interest rate is (8 per cent per annum). Column (3) in the table shows the discounting of the corresponding year. (1) (2) (3) t CF DF, 7 1 1 $1,000,000 0.9259 2 0.8573 $1,000,000 $1,000,000 3 0.7938 Calculate the security's duration? (ii) Would you expect the duration of the security to be shorter or longer than its maturity? Why? (3 marks) (a) The following table shows the annual cash flow of a security that will mature in three years. The current interest rate is (8 per cent per annum). Column (3) in the table shows the discounting of the corresponding year. (1) (2) (3) t CF DF, 7 1 1 $1,000,000 0.9259 2 0.8573 $1,000,000 $1,000,000 3 0.7938 Calculate the security's duration? (ii) Would you expect the duration of the security to be shorter or longer than its maturity? Why