1. You are managing a portfolio of $5 million. Your target duration is 10 years, and you can choose from two bonds: a zero-coupon bond with a maturity of 5 years, and perpetuity, each currently yielding 8.00%.

1. What weight of each bond will you hold to immunize your portfolio? (10 points)
2. How will these weights change next year if the target duration is now 9 years? (15 points)
3. If you do not rebalance your portfolio of immunizing assets over the second year of the investment period. What will be the difference in duration between the portfolio and the obligation it seeks to immunize? (10 points)
4. How far apart approximately will the value of the obligation and the value of the portfolio be if, under the conditions of part c., interest rates increase by 50 basis points? (10 points)

(Please show how to do it and excel if possible) thank you.