I. Consider the following three bonds: Bond S Bond T Par Value Bond N 1,000 9% 1,000 6% 1,000 Zero Coupon Time to Maturity Required Yield 3 years 4 years 6 years 6% 6% 6% (a) Calculate and interpret the present values of each bond. (12 marks) (b) Calculate and interpret the Macaulay Duration for each bond. (9 marks) (c) An investor decides to increase their holding of Bond N and to reduce their holding of Bond T. Comment on the investor action and his expectation for future interest rate changes. (4 marks)