The Clarence Corporation has issued bonds that pay semiannually with the following characteristics:

a$.$ Calculate modified duration using the information provided. Do not round intermediate calculations. Round your answer to two decimal places. Use only the data provided in the table above $($in the

problem statement$)$ for your calculations.

years

b$.$ What is a better measure when calculating the bond's sensitivity to changes in interest rates?

$]$ is a better measure of the bond's sensitivity to changes in interest rates as

considers only the final cash flow, while

$EE$ includes other factors.

c$.$ Identify the direction of change in modified duration if:

the coupon of the bond were $10\%,$ not $8\%.$

Modified duration

$EE$ as the coupon increases.

the maturity of the bond were $6$ years, not $14$ years.

Modified duration

$]$ as maturity decreases.