An investor holds $$20$k in $8-$year Zeros and $$80$k in $3-$year Zeros. The yield curve for Zeros is flat at $4\%,$ What is the Macaulay duration of this portfolio? Round to the nearest $0\mathrm{.}01$ year.

$3\mathrm{.}92$ years

$4\mathrm{.}00$ years

$4\mathrm{.}90$ years

$5\mathrm{.}00$ years

None of the above

A bond portfolio manager has $$10$M to invest. She believes that interest rates will drop in the next month. Which of the following US Treasury bonds should she buy to increase her portfolio's profits as much as possible? Assume the yield curve for US Treasuries is flat at $3\%.$

$6-$month US Treasury bill

$3-$year $0\%$ coupon US Treasury note

$5-$year $3\%$ coupon US Treasury note

$9-$year $0\%$ coupon US Treasury note

$10-$year $3\%$ coupon US Treasury note