3 (Required, 25 marks) The following table shows the information of 3 bonds. Bond A Bond B Bond C Price 100 100 100 Macaulay duration Modified convexity 5.2 44.86757 4.6 27.90084 7.5 60.09049 The term structure is always flat and the current annual effective interest rate is to 3%. (a) An investor has $20000 and would like to invest his capital in these 3 bonds for 6 years and wishes to earn annual return at least 3%, regardless of the future interest rate level. Determine the best portfolio that can achieve this goal. Provide full justification to your answer. (b) Another invest has $10000 and would like to invest his capital in these 3 bonds for 3 years. He wishes to earn annual return of at least 4%. Determine a portfolio, if any, that can achieve the goal. Provide full justification to your answer. (*Note: If there is no such portfolio, please provide detailed explanation to your answer.)