You are reviewing a $1000 bond with a 4% annual coupon with 3 years to maturity and a yield to maturity (YTM) of 6.75%.

Calculate the market price (P0),

Calculate the duration (D) and modified duration (D *) for this bond,

Calculate the new market price using the yield to maturity of 6%,

Compare your answer using modified duration, estimate the new market price for this bond if the yield falls by .75% to 6%.