You are given the following information with respect to a callable bond:
Time/ Exected cash flows at 7% Annual yield
1 /8.00
2/ 7.90
3 /107.80
Annual Yield/ Bond Price
6% /104.33
7% /102.37
8%/ 99.76
The current yield is 7%
Calculate the ratio of the modified duration to the effective duration of this bond.