Find the duration of a 9.0% coupon bond makingsemiannuallycoupon payments if it has three years until maturity and has a yield to maturity of 6.0%. What is the duration if the yield to maturity is 11.4%? \The face value of the bond is $100.

6% YTM:

11.4% YTM :

You are managing a portfolio of $1 million. Your target duration is 10 years, and you can invest in two bonds, a zero-coupon bond with maturity of five years and a perpetuity, each currently yielding 5.6%.

a.What weight of each bond will you hold to immunize your portfolio?

zero-coupon bond: ?%

Perpetuity bond : ?%

b.How will these weights changenext yearif target duration is now nine years?\zero-coupon bond: ?%

Perpetuity bond : ?%