Consider a debt instrument with a payoff at time 3 equal to 2.5r3. a) What is the price of this payoff at time 0? b) What is the dollar duration of this payoff? c) What is the duration of this payoff?

		Bond price		Zero price
Coupon	Maturity	per $100 par	Bond yield	per $1 par	Zero rate
2.000%	0.5	100.0000	2.000%	0.9901	2.000%
3.000%	1.0	100.4944	2.496%	0.9755	2.500%
4.000%	1.5	101.4755	2.987%	0.9563	3.000%
5.000%	2.0	102.9329	3.469%	0.9330	3.500%
6.000%	2.5	104.8548	3.942%	0.9057	4.000%
6.000%	3.0	105.0731	4.183%	0.8815	4.250%