1A. If a bond has a duration of 5, and is yielding 3%, what rate of interest would you earn by investing in this bond and keep it for 5 years.

1B. Would that be the rate for one year or annually for 5 years?

1C. If an insurance company would like to use this bond to form a guaranteed investment contract GIC and offer a guaranteed rate of return to investors for certain years, what is the maximum yield to be offered? Why? Explain.

1D. If an insurance company would like to use this bond to form a guaranteed investment contract GIC and offer a guaranteed rate of return to investors for certain years,

for how many years could it be guaranteed? Explain.