You own an annual (one payment per year) bond that pays an annual coupon of 6% and matures in three years. The current yield to maturity on this bond is 8% and it has a par value of $1000.

What is the duration of this bond?

Assume that the duration of the bond is 2.5 years (which is not what you calculated before). Based on this duration, if the yield to maturity dropped to 7.6%, how much would you expect the bond to change in price?

Assume that the duration on that bond is 2.5 years. If this bond consists of 80% of your portfolio, and a zero-coupon bond that matures in five years is the other 20% of your portfolio, what is the duration of your portfolio?