A liability payable in 4 years was immunized with coupon bonds (coupon paid wice a you) with time to maturity of two and five years. The duration of two year bonds was 1928 years The value of five-year bonds in the portfolio is 73.54% a) Find the duration of the second bond (five-year bond). (4 points) b) Estimate the difference in percentage points) in the change in the prices of these bonds, if the market interest rates rise from 6% to 6.5%. (4 points) c) Explain: price of which of the above bonds is more sensitive to interest rate changes and why? (2 points)