Two bonds, A and B, are currently trading in the market. Bond A is a 3-year coupon bond with a face value of $100, selling for $113.616; coupons are paid annually. Bond B is a perpetuity with an initial cash flow of $1 in one year's time, with cash flows growing thereafter at 1% per year. (c) Determine Bond A's coupon rate and the price of Bond B. (d) Calculate Bond A's Modified Duration. Without recalculating the bond price, estimate the percentage change in the price of Bond A if the entire term structure were to immediately shift downwards by 100 basis points (1 basis point is one hundredth of 1 percent, i.e. 0.01%) (e) Show that the Modified Duration of a growing perpetuity with initial cash flow C1 (at time 1), cash flow growth rate g, and discount rate r is given by: 1 DMod = r - - 8 Using this expression, calculate the Macaulay Duration of Bond B