Exhibit 13.14 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) You are creating a portfolio that consists of the following two bonds. Bond A pays an annual 7 percent coupon, matures in two years, has a yield to maturity of 8 percent, and a face value of $1,000. Bond B pays an annual 8 percent coupon, matures in three years, has a yield to maturity of 9 percent, and a face value of S1,000. 23. Refer to Exhibit 13.14. Assume that your investment horizon is two vears and your portfolio consists only of bonds A and B. What proportion should be invested in each bond to immunize the portfolio? a. Invest 72.4 percent in bond A and 27.6 percent in bond B. b. Invest 68.3 percent in bond A and 31.7 pereent in bond B. c. Invest 58.5 percent in bond A and 41.5 pereent in bond B. d. Invest 31.7 percent in bond A and 68.3 percent in bond B. e. Invest 27.6 percent in bond A and 72.4 percent in bond B. 26. Refer to Exhibit 13.14. Calculate the Macaulay Duration for Bond B. a. 1.44 b. 2.47 c. 2.55 d. 2.70 e. 2.78 27. Refer to Exhibit 13.14. Calculate the Maceulay Duration for Bond A. a. 0.98 b. 1.79 c. 1.90 d. 1.93 e. 2.31 28. Refer to Exhibit 13.14. Caleulate the price of Bond B. a. $974.69 b. 5990.64 c. 5995.22 d. $1,013.88 e. $1,025.77