James has a portfolio which consists of three bonds (henceforth referred to as bond A, bond B and bond C). Assume the yield rate is j_2 = 7% p.a. Bond A is a 3-year Treasury bond with the coupon rate of j_2 = 5% p.a. and face value of 100. This bond matures at par. Bond B is a 5-year bond with the coupon rate of = 4.5% p.a. and face value of 100. This bond matures at par. The duration of this bond is 4.5 years. Bond C is a 7-year zero-coupon bond with the face value of 100. This bond matures at par. Calculate the price of bond A. B and C respectively. b. Calculate the durations of bonds A and C, respectively. Express your answer in terms of years and c. Calculate the portfolio's duration. Express your answer in terms of years and d. James is planning to use the holding period property of bond B to meet his future liability. i What amount of fixed liability at the end of 4.5 years could be immunised by using bond B ? ii What are the assumptions we need to use the holding period property for immunisation