On Jan 1, 2012, FIN307 is considering the newly issued 10-year AAA corporate bond, which is due Jan 1, 2022, with a coup

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On Jan 1, 2012, FIN307 is considering the newly issued 10-yearAAA corporate bond, which is due Jan 1, 2022, with a coupon rate of6% per year paid every 6 months. The bond is traded atpar. Suppose the market interest rate declines by 100 bps(i.e., 1%), what is the duration and modified duration (beforeinterest rate changes) and the effect of the market interestdecline on the bond price?
Hint: Pls do not use your financial calculator“built-in” duration function to generate the number, because thefinancial calculator allowed by the department policy does not havethat function at all. Please instead go to excel and do thecalculation manually by setting up 6 columns for t (=1, 2, 3…..20),DF(discount factor or 1/PV factor), CF (cashflow), PV (presentvalue of CF=CF*DF), w(weight=PV/sum of PV or P0), andt*w. Then sum up all t*w, then divide by 2 (because here coupon ispaid semiannually).