(A) An investor has the following bond portfolio: Face Value Semi Annual Coupon (%pa) Maturity (Yrs) Semi Annual Yield (%pa) Bond A US$2,000,000 10 6 7.4 Bond B US$4,500,000 3 5 6.6 Bond C US$3,500,000 6.5 1 8 Bond D US$7,000,000 0 12 5 US$17,000,000

(i) What is the portfolio Macaulay duration?

The portfolio Macaulay duration is 6.931 years

(ii) The interest rate outlook expects to increase so the investor decides to reduce the portfolio to a target Macaulay duration of 3. The investor decides to keep the weighting on Bond C and Bond A, how much Bond B and Bond D do the investor need to change in order to meet the target?

Please answer (ii) , I would give you a like thanks