a. If the two bonds are to be combined to form a portfolio that will provide you with protection against interest rate risk, what should be the weights of bond A and bond B in the portfolio?

b. How many of the bonds A and B would you need to buy in order to construct this portfolio?

please put all the calculation and formulas.

You anticipate that you will have a significant liability of 5 million due three years from now. The term structure is currently flat at 8%. You can invest in one or both of the following two annual coupon paying bonds to protect yourself against interest rate risk: Bond A: a three-year bond with a coupon rate of 9% Bond B: a five-year bond with a coupon rate of 8% Each bond has a yield to maturity of 8% and a face value of 1,000. Also, assume that duration is a perfect measure of interest rate risk