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Assume the face value of the bond is £100   i

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Assume the face value of the bond is £100  

i. Calculate the Macaulay Duration for an £9 annual coupon bond with 3 years left to maturity if the bond’s yield to maturity is 8%. (Show your calculations)

ii. What is the modified duration of the bond?

iii. If 3 year yields to maturity were to suddenly to increase from 8% to 9% and the bond in problem (i) was selling for £102.58 at 8% yield, what would you expect the bond price to be after the yield increases to 9% ?