An investor is considering purchasing a Treasury bond with 2 years remaining until maturity, a 3 percent coupon and a 2.5 percent required rate of return. The bond pays interest semiannually.

a. What is the Macaulay duration of this bond? Round to 4 decimal places.

b. If annual promised yields decrease by 15 basis points, what is the predicted price change in dollars based on the bonds duration ? Round your answer to the nearest cent.

c. Imagine if the bond instead paid zero coupon but was otherwise identical (2 years until maturity and a 2.5% required yield.) What is the duration of this bond? What price will this bond sell for today?