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A bond portfolio consists of the following option-free annual-pay coupon bonds:
Bond 1 Bond 2
Par value $300,000 $450,000
Market value $200,000 $400,000
Yield to maturity 4% 3%
Macaulay duration 7.5 5.4
The modified duration of this portfolio is closest to:
A
5.9.
B
6.0.
C
6.1.