Question: Question 2 (17 marks) a. Peter buys a 3% annual coupon bond with five years to maturity. The bond has a yield-to-maturity of 8%. The

Question 2 (17 marks) a. Peter buys a 3% annual coupon bond with five years to maturity. The bond has a yield-to-maturity of 8%. The par value is $1,000. 1. Calculate the duration and modified duration of the bond. (5 marks) it. If the yield decreases to 7.5%, what is the new bond price using the duration concept

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