Consider four risky assets. Security A is a two-year default-free bond with a face value of $100, a coupon rate of 5% and a yield to maturity of 5%. Security B is a three-year floating rate (LIBOR 1Y +2%) bond with face value of $100. Security C is a risky stock with an expected return of 10%, a plowback ratio of 50%, a constant return of equity of 10% and an expected dividend one year from now of $1 per share. Security D is a risky stock whose current dividend (just paid) is $1 and whose dividend is expected to grow by 50% this year and by zero thereafter forever, also with an expected return of 10%. All cash-flows are paid annually with the first cash flows due one year from now. a) Find the Present Value and duration of security A. b) What is the duration of security B? Explain. c) Find Present Values of securities C and D. d) You are given the following information: After one year, the price of security B declines, while the price of all default free bonds is unchanged. The decline in price of C is equal to only one half of the decline of B. Discuss the reasons why security B's price declined, assuming that there is only one common risk factor to asset returns. Make sure your reasons account for observed behavior of other two securities