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a) What are the Macaulay's and Modified durations for a 7% annual bond with three years to maturity? YTM is 8%. b) Suppose the

a) What are the Macaulay's and Modified durations for a 7% annual bond with three years to maturity? YTM is 8%. b) Suppose the yield on the bond in part b) suddenly increase by 2%. Use duration obtained in b) to estimate the new price of the bond. Par value of the bond is $100.

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