(a) Distinguish between the full valuation and duration approaches to measuring interest rate risk. (b) Define Macaulay

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(a) Distinguish between the full valuation and duration approaches to measuring interest rate risk.
(b) Define Macaulay bond duration, and describe the general and the closed-form formulas to measure Macaulay duration.
(c) Using Macaulay’s general and closed form formulas, calculate the duration of a 6 percent, $1,000 par bond maturing in three years if the yield to maturity is 10 percent and interest is paid semiannually.