A university endowment fund has sought your advice on its fixed-income portfolio strategy. The characteristics of the portfolio's current holdings are listed below:

Bond	Credit Rating		Maturity (yrs.)		Coupon Rate (%)		Modified Duration		Convexity		Market Value of Position
A	U.S. Govt.		3		0		2.712		9.9		$30,000
B	A1		10		9		6.204		56.3		30,000
C	Aa2		5		10		3.654		18.5		30,000
D	Agency		7		11		4.868		32.2		30,000
E	Aa3		12		0		10.909		128.9		30,000
											$150,000

1. Calculate the modified duration for this portfolio (i.e., Mod D_p). Do not round intermediate calculations. Round your answer to three decimal places.

   years

2. Suppose you learn that the implied sensitivity (i.e., modified duration) of the endowment's liabilities is about 6.70 years. Identify whether the bond portfolio is: (1) immunized against interest rate risk, (2) exposed to net price risk, or (3) exposed to net reinvestment risk.

   The portfolio's duration is -Select-less thanmore thanequal toItem 2 the liability's duration, portfolio is -Select-immunized against interest rate riskexposed to net price riskexposed to net reinvestment riskItem 3 .

Problem 13-10 A university endowment und has sought your advice on its come porostrategy. The characters the part's curtos are listed Credit Maturity Coupon Modified Market Value Bond Rating (y) Rate(%) Duration Convexity of Position A US Govt 3 2.712 9.9 $30,000 Al 10 6204 6 30,000 A2 5 10 3.654 18.5 30,000 D Agency 7 11 4.560 32.2 30,000 A 12 0 10.09 1280 30.000 3150.000 .. Calculate the modified duration for this perto de Mod.). Dentroundiname calculation. And your answer to the domallas yes Suppose you learn that the implied sensitivity rodited out of the endowments about 70 van Identity beer the latest sk. (2) exposed to net pricey exposed to net reinvestment The portfoliosion is the bon portfold