A financial instrument provides three future cash flows:

1. $1,128.95 at the end of 2 years
2. $1,987.53 at the end of 7 years
3. $2,365.86 at the end of 13 years

Calculate the duration (D) of the financial instrument at a yield of8% pacompounded yearly. Give your answer in years to 2 decimal places.

D = ?years

A portfolio consists of the following two investments:

• a bond with face value of $100.00 paying annual coupons of 10% maturing in 5 years
• an annuity with payments of $45.00 at the end of each year for 5 years

The portfolio is comprised of 44% bonds and 56% annuities.

The term structure is flat and the current yield is7% paeffective.

Calculate the duration (D) of the portfolio. Give your answer to 2 decimal places.

D =?years