Calculate the Macaulay duration of a 9%, $1,000 par bond thatmatures in three years if the bond's YTM is 14% and interest ispaid semiannually. You may use Appendix C to answer thequestions.
A. Calculate this bond's modified duration. Do not roundintermediate calculations. Round your answer to two decimalplaces.
B. Assuming the bond's YTM goes from 14% to 13.0%, calculate anestimate of the price change. Do not round intermediatecalculations. Round your answer to three decimal places. Use aminus sign to enter negative value, if any.
