A portfolio of zero bonds is comprised of 10million of 2 year bonds and 5million of 5 year bonds and a liability of 15million of 3 year bonds. What type of duration should be calculated for this portfolio?

1. Straight duration
2. Modified duration
3. Macaulay duration
4. Dollar duration

Calculate the modified duration of a 2 year bond with a face value of 200 that pays a 5% coupon semi-annually. The discount factors are given in the following table.

time	Discount factor
0.5	0.98
1.0	0.96
1.5	0.94
2.0	0.90

1. 1.93 years
2. 2.14 years
3. 2.00 years
4. 1.22 years