3. Given the following bonds: Bond B Duration (years) 5 10 12 BO The yield curve is 10%. Further assume that the three bonds are of equal value and the only bonds existing. Set up a single-index representation of their covariance. What is the covariance between all pairs of bonds? 1 3. Given the following bonds: Bond B Duration (years) 5 10 12 BO The yield curve is 10%. Further assume that the three bonds are of equal value and the only bonds existing. Set up a single-index representation of their covariance. What is the covariance between all pairs of bonds? 1