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A three year bond has a face value of $1,000. The bond pays annual coupons at a rate of 5%, and the yield to maturity

A three year bond has a face value of $1,000. The bond pays annual coupons at a rate of 5%, and the yield to maturity is 4%. (use excel to answer)

(a) Compute the Macaulay Duration and Modified Duration

(b) Using the Modified Duration formula, compute the percentage change in the bond price for a 1% increase in the yield to maturity

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