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What is the macaulay duration of the bond dmac

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The effective annual rate j = 4% and j = 0:5%. P(j) = $1135:05 is the price of a bond at j = 4%, and Pmac(j + j) = $1103:08 is the rst order Macaulay approximation to the bond price at j + j = 4:5%.

Problem a) What is the Macaulay duration of the bond Dmac(j) (calculated at j = 4%)?

Problem b) What is the first order Modified approximation to the bond price calculated at j j = 3:5%?

Reference no: EM132796789

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