4. Cash as an Investment Portfolio. In this question, we'll compare two inv Portfolio A contains only cash, and Portfolio B contains only U.S. Treasury bonds. about standard bonds, not inflation-protected bonds.) Both portfolios start with maintained in the following way. All of the initial funds are invested in one-mont and once those bonds mature, the entire payout is used to buy a new set of one-mom This is repeated every month. (a) Denote by & the interest rate on the bonds that mature in month t. That is, Portfolio B in month & - 1, we get 1 + 4 dollars in month t. How do you call portfolio B after n months? (b) Treasury bonds are typically considered virtually risk-free and totally liquid, coincide with the present value. Suppose that, in month & - 1, you buy a bond that matures in month t. Given it; how would you compute the price of this (c) Go to FRED, and download data on the yield on 1-month Treasury bonds and the CPI (code: CPIAUCSL). When you select the yield data, use the change the frequency to monthly. (Next to the drop-down for frequency, the called "Aggregation method," which should be set to "average.") Also, the yiel annualized, and we want them to be monthly. Consequently, all of the yields by 12 before you use them in any calculations below. i. Plot the yield series over the entire span of time for which data is availab ii. Over the same time span, plot the price of a one-month treasury bond the of $1. iii. Suppose that Portfolios A and B are started in August, 2001. Plot the value in dollars, over time on the same set of axes. iv. To convert the value of an asset from dollars to goods, it's necessary to d