A liability consists of 2 payments of 1000 to be made year and 1 year in the future. There are two investments available. The first option is a 1000, 6 month bond with 8% semiannual coupons and a yield rate of 6% convertible semiannually. The second option is a 1000, 1 year bond with 5% semiannual coupons and a yield rate of 7% convertible semiannually. a) Calculate the total cost of a portfolio which exactly matches the liabilities. b) Calculate the effective annual yield rate for this portfolio.