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Come someone help? 3) Suppose an annual bond with 5% annual coupons matures...

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Come someone help?

3) Suppose an annual bond with 5% annual coupons matures in 2 years. The bond sells at par (P=F). a) Determine the Macaulay duration of the bond. b) Determine the modified duration of the bond. Hint: Let F be the Iace value = redemption value =C of the bond. Since the bond sells at par, P=F and r=j=0.05. So F=P=Frvr+(Fr+F)vr2. When finding the durations, the F will cancel. Could take P=F=C=1000 and Fr=50

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