New South Wales Treasury has issued $1,000 face value, 3 - y e a r bonds that pay semi-annual coupons at a rate of 10 per cent and 4-year bonds that pay semi-annual coupons at a rate of 16 per cent. The market interest rates decreased sharply just after the issue and the current market rate for similar bonds is 9.2 per cent. a. What would be the bonds current market values (prices)? b. Calculate the duration for the bonds. c. If the market condition is expected to be volatile and if you are a risk-averse investor, what bond should you include in your portfolio?