A paid an annual dividend of

(c) An investor decides to construct a bond portfolio made up of $10,000 in the four year 5% coupon bond (in (b) above) and $30,000 in a three year zero coupon bond (par value = $1,000). What is the Macaulay duration of this bond portfolio? (4 marks) (b) Calculate the Macaulay duration of a four year 5% coupon bond where the market interest rate is 4%. Assume the par value of the bond is $1000. And coupons are paid annually (4 marks) (c) An investor decides to construct a bond portfolio made up of $10,000 in the four year 5% coupon bond (in (b) above) and $30,000 in a three year zero coupon bond (par value = $1,000). What is the Macaulay duration of this bond portfolio? (4 marks) (d) For the four year 5% coupon bond described in (b) above, would the Macaulay duration of this bond increase or decrease if the market interest rate increases from 4% to 5%? Explain your answer. (3 marks) (c) An investor decides to construct a bond portfolio made up of $10,000 in the four year 5% coupon bond (in (b) above) and $30,000 in a three year zero coupon bond (par value = $1,000). What is the Macaulay duration of this bond portfolio? (4 marks) (b) Calculate the Macaulay duration of a four year 5% coupon bond where the market interest rate is 4%. Assume the par value of the bond is $1000. And coupons are paid annually (4 marks) (c) An investor decides to construct a bond portfolio made up of $10,000 in the four year 5% coupon bond (in (b) above) and $30,000 in a three year zero coupon bond (par value = $1,000). What is the Macaulay duration of this bond portfolio? (4 marks) (d) For the four year 5% coupon bond described in (b) above, would the Macaulay duration of this bond increase or decrease if the market interest rate increases from 4% to 5%? Explain your