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1. The due diligence process
a. Uncovers all of the potential risks of an investment
b. Underwrites a project’s future cash flows with a high degree of certainty
c. is necessary only within an investment posses a high degree of risk
d. is an imperfect process to determine whether the potential returns from an investment are sufficient given the potential risk
2. Macaulay and modified durations
A. A 5-year bond paying annual coupons of 4.432% and selling at par.
B. An 8-year bond paying semiannual coupons with a coupon rate of 8% and a yield of 7%.
Please show it step by step
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