A bank offers a corporate client a choice between borrowing $1,000,000 cash at 11% per annum and borrowing 1,000 oz. gold at 2% per annum. (If gold is borrowed, interest must be repaid in gold. Thus, 1000 ounces borrowed today would require 1020 ounces to be repaid in one year.) The price of Gold is $1,000/oz. The risk-free interest rate is 9.25% per annum, and storage costs are 0.5% per annum. The interest rates on the two loans are expressed with annual compounding. The risk-free interest rate and storage costs are expressed with continuous compounding. What should the investor do? a. Borrow Gold b. Borrow Cash What does duration tell you about the sensitivity of a bond portfolio to interest rates? a. If the duration is high, the sensitivity is low b. If the duration is high, the sensitivity is high c. Duration measures the effect of non-parallel shifts in yield curve d. If interest rates increase, the bond price will increase