Elliot Karlin is a 35-year old bank execut ve who nas ust innen ed large sum ot money intends to use S1 million of his inheritance to purchase U.S. Treasury bonds: 1. An 8.69%, 13-year bond that's priced at $1,099.49 to yield 7.48% 2 A 7 846% 15-year bond that's priced at $1026 31 tyeid 7 55% 3 A 20-year stripped Treasury (zero coupon) thats priced at $197 38 to yield 828% 4. A 24-year, 7.48% bond that's priced at $958.22 to yield 7.87%. Nolc that these bonds ae scmiannual compouning bonds Ha ng spent several years in th ? ba s investments department he's well aware ot the conce a duraton and decides to app it O hs ond port ol n particular Elin a. Find the duration and the modifed duration of each hand b. nd the dureton of the whole bond portfolo f Elliot puts $250,000 into each of the 4 U.S. Treasury bonds. c. Firnd the duraion of the portfolio if Elliot puts $350,000 each into bonds 1 and 3 and $150,000 each into borids 2 and4 d. Which portfolio or c sho i Elliot el ct ir he thinks rates ar a ut to head up and he wants to avoid as much rice olatility as po sible? Explain Forn hid portfolio do reconnend, and wy? he stand make more in an al int 1 no ? which port o would you a. The duration and modified duraton can be calculated using spredsheet, such as Exce Rond 1. 13 years 8 69%, pnced 1 yield 7 48% The duration of this bond isyears. (Round to two decimal places.) The modified duration of this bond years. Round to two decimal places.) Hond 2: 15 years, 846% priced to yield 1 55% It gives the precise duraton measure because it avods the rounding off errors. whicn are nevtable with m nual calculations The duration or this bond is years (Round to two decimal places ) I he modhed duration ot this bond isyears ound to two decimal places.) Bond 3. 20 years. Lero coupon, piced lo yield B.26% The duretion ot this bond isyears. (Round to two decimal places.) Ihe modited duraton of this bond isyears (Round to two decimal places) Bond 4 24 years, 40%, priced to yield 7.87% The duration of this bond is years. (Round to two decimal places.) b. Fird the duralion of the whlebod po lfolio if Ellil puls S250,000 inlo eah of he 4 U. Treasury borids The duretion of this portolio is years. Round to two decimal places.) c. Find the duration of the portolio if Elliot puts $150,000 cach into bonds 1 and 3 and $150,000 cach into bonds 2 and 4 The duration of this portfolio is years. (Round to two decimal places. The modificd duration of this bondisyears Round to two decimmal places ) Elliot Karlin is a 35-year old bank execut ve who nas ust innen ed large sum ot money intends to use S1 million of his inheritance to purchase U.S. Treasury bonds: 1. An 8.69%, 13-year bond that's priced at $1,099.49 to yield 7.48% 2 A 7 846% 15-year bond that's priced at $1026 31 tyeid 7 55% 3 A 20-year stripped Treasury (zero coupon) thats priced at $197 38 to yield 828% 4. A 24-year, 7.48% bond that's priced at $958.22 to yield 7.87%. Nolc that these bonds ae scmiannual compouning bonds Ha ng spent several years in th ? ba s investments department he's well aware ot the conce a duraton and decides to app it O hs ond port ol n particular Elin a. Find the duration and the modifed duration of each hand b. nd the dureton of the whole bond portfolo f Elliot puts $250,000 into each of the 4 U.S. Treasury bonds. c. Firnd the duraion of the portfolio if Elliot puts $350,000 each into bonds 1 and 3 and $150,000 each into borids 2 and4 d. Which portfolio or c sho i Elliot el ct ir he thinks rates ar a ut to head up and he wants to avoid as much rice olatility as po sible? Explain Forn hid portfolio do reconnend, and wy? he stand make more in an al int 1 no ? which port o would you a. The duration and modified duraton can be calculated using spredsheet, such as Exce Rond 1. 13 years 8 69%, pnced 1 yield 7 48% The duration of this bond isyears. (Round to two decimal places.) The modified duration of this bond years. Round to two decimal places.) Hond 2: 15 years, 846% priced to yield 1 55% It gives the precise duraton measure because it avods the rounding off errors. whicn are nevtable with m nual calculations The duration or this bond is years (Round to two decimal places ) I he modhed duration ot this bond isyears ound to two decimal places.) Bond 3. 20 years. Lero coupon, piced lo yield B.26% The duretion ot this bond isyears. (Round to two decimal places.) Ihe modited duraton of this bond isyears (Round to two decimal places) Bond 4 24 years, 40%, priced to yield 7.87% The duration of this bond is years. (Round to two decimal places.) b. Fird the duralion of the whlebod po lfolio if Ellil puls S250,000 inlo eah of he 4 U. Treasury borids The duretion of this portolio is years. Round to two decimal places.) c. Find the duration of the portolio if Elliot puts $150,000 cach into bonds 1 and 3 and $150,000 cach into bonds 2 and 4 The duration of this portfolio is years. (Round to two decimal places. The modificd duration of this bondisyears Round to two decimmal places )