A company faces a stream of obligations over the next 4 years as shown below, where the numbers denote thousands of dollars.

Year	1	2	3	4
CF ('000)	200	0	500	300

The spot rate curve is given below:

Year	1	2	3	4	5	6	7	8	9	10
Spot Rate (%)	6.68	7.27	7.81	8.31	8.75	9.16	9.52	9.85	10.15	10.42

The company decides to invest in two bonds (each with face value $1,000) described as follows:

Bond 1 is a 4-year 8% coupon bond, and

Bond 2 is a 3-year zero-coupon bond.

(a) Calculate the prices of the two bonds and the obligation. (Keep 2 decimal places, e.g xx.12)

Bond 1:  _____________ Bond 2: ______________ Obligation: __________

(b) Calculate the quasi-modified durations for the two bonds and the obligation. (Keep 2 decimal places, e.g xx.12)

Bond 1:  ____________ Bond 2: ______________ Obligation: _____________

(c) Find a portfolio P₁x₁ + P₂x₂, where x₁ and x₂ denote the number of units of bonds 1 and 2, that has the same present value as the obligation stream and is immunized against a parallel shift in the spot rate curve. (Keep 2 decimal places, e.g xx.12)

x₁: _____________ x₂: __________________