Compute the Macaulay duration under the following conditions:

a$.$ A bond with a four$-$year term to maturity, a $9\%$ coupon $($annual payments$),$ and a market yield of $9\%.$ Do not round intermediate calculations. Round your answer to two decimal places. You may

use Appendix $C$ to answer the questions. Assume $$1,000$ par value.

years

b$.$ A bond with a four$-$year term to maturity, a $9\%$ coupon $($annual payments$),$ and a market yield of $13\%.$ Do not round intermediate calculations. Round your answer to two decimal places. You may

use Appendix $C$ to answer the questions. Assume $$1,000$ par value.

years

c$.$ Compare your answers to Parts a and $b,$ and discuss the implications of this for classical immunization.

As a market yield increases, the Macaulay duration

immunized.

$.$ If the duration of the portfolio from Part $a$ is equal to the desired investment horizon the portfolio from Part $b$ is

$|$ perfectly