Interest Rate Maturity

) You own a two year, semi-annual_$10,000 par bond with a coupon of6.8%. The market yield is 6.1%. 3. Calculate the bond's Macaulay duration. (This is just a way to reinforce some terminology. The duration we calculate in this class is called Macaulay duration; it is the simplest duration model.) b. Ifthe market rate falls by 1%, what is the estimated impact on the bond's price? You will have a decision to make about what yield (R in myfornmlas) to use in the denominator of the fbrmula you will use to get the new price predicted by duration. Use the nominal annual yield (R) because the interest rate change you are given is ammo]. That is for part "b, " not part u 'l a. c. _ What is the exact new price using bond pricing techniques? Compare "b" and "c." Are the prices as expected