b) (Duration) Consider a 2 year and 3 year coupon bond with a face value of 100 and selling today at 94 and 92, respectively. Coupons are payable annually and the yield to maturity is 8% and 11% per annum, respectively. Required: Find the Macaulay duration. (5 marks) Discuss the sensitivity of these assets to the variation in the interest rate. (2 marks) Discuss the benefit of using a duration measure rather than the simple maturity. Please, underline at least one weakness of using the information provided by a duration measure. (3 marks) Total for b): 10 marks b) (Duration) Consider a 2 year and 3 year coupon bond with a face value of 100 and selling today at 94 and 92, respectively. Coupons are payable annually and the yield to maturity is 8% and 11% per annum, respectively. Required: Find the Macaulay duration. (5 marks) Discuss the sensitivity of these assets to the variation in the interest rate. (2 marks) Discuss the benefit of using a duration measure rather than the simple maturity. Please, underline at least one weakness of using the information provided by a duration measure. (3 marks) Total for b): 10 marks