Calculate duration and modified duration for the bond what, Financial Management

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Calculate duration and modified duration for the bond what

A bond that pays annual coupons has a par value of $1,000, an 8% coupon rate, 3 years left to maturity, and is currently priced at a YTM of 6.0%.

(a) Calculate duration and modified duration for the bond.

(b) If the YTM on the bond changes from its current 6.0% up to 8.0%, what price change (% and $) and new price ($) is predicted by the modified duration calculated in part a.?

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Financial Management: Calculate duration and modified duration for the bond what

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