A portfolio consists of the following two bonds:

$10,000 market value Bond A with duration of 4;

$30,000 market value Bond B with duration of 6;

Both bonds yield at 10% and make an annual couple payment.

(Part 1) What is this bond portfolios Macaulay duration?

a. 5.00

b. 4.90

c. 6.00

d. 5.50

(Part 2): If the yield-to-maturity for both bonds increased by 1%, the percentage loss in the portfolio's market value is closet to:

a. 4.00%

b. 5.00%

c. 5.50%

d. 6.00%

(Part 3): What is the bond portfolios Dollar duration?

a. 2,200

b. 55,000

c. 220,000

d. 160,000

(Part 4): if the target dollar duration for this portfolio is 3,000, what is the rebalancing ratio?

a. 0.864

b. 1.364

c. 1.251

d. 0.733