Detailed Answer
(C)
Bond’s Duration = ΣPV×T ÷ ΣP
ΣP = 1053421
Now, a = 0.943396 and a^t = 0.839619
So, ΣPV×T = 80000 × 16.666 × (0.160381÷0.056604 –
2.518857) + 2518857
= 419370.767 + 25188579
= 2938227.77
So, Duration of the Bond
= 2938227.77 / 1053421
= 2.79 years
& Modified Duration
= Mckauley Duration ÷ (1 + R)
= 2.79 ÷ 1.06
= 2.63