Mr. Richard now wants you to apply the effective duration formula he learned in CFA training to the bonds at issue and 1 year forward from questions 3 and 4.

Effective Duration= (MV^-50BPS-MV^+50BPS)/2*MV^base *50

He would also like a marginal analysis performed for both the original and the forward bond analysis. This should show the base duration and yield for the shortest bond and then the change in yield and duration for each longer bond. He explains that the 5 year is the base and the change shows the additional risk/reward for buying the longer maturities.