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Suppose there are 3 possible investments: A 17-yr zero coupon bond. A 17-yr annuity that pays 7% per year. A perpetuity that pays 7% per

Suppose there are 3 possible investments:

A 17-yr zero coupon bond.

A 17-yr annuity that pays 7% per year.

A perpetuity that pays 7% per year.

Each investment has a face value of $100 and a discount rate of 10%. Which investment has the longest modified duration? Explain.

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