Bond duration

An investor is considering purchasing a Treasury bond with 3 years remaining until maturity, a 4 percent coupon and a 6 percent required rate of return. The bond pays interest annually.

a. What is the Macaulay duration of this bond? (8pt)

b. If annual market yields increase by 35 basis points, what is the predicted price change in dollars based on the bonds duration? Round your answer to the nearest cent. (6pt)

c. Imagine instead this security was a zero coupon bond, but otherwise had the same time to maturity and discount rate. What would the duration of this bond be? (2pt) What is the current value of this bond (round to the nearest cent)? (2pt)

d. Imagine if this security paid interest semiannually instead. Would the duration of the bond increase or decrease, relative to your answer in part A? Why? (No calculations necessary) (2pt)