QUESTION 1 Assume annual compounding and that the yield curve is flat at 4.00% pa nominal. Suppose we have a liability of $700,000 due in exactly 8 years time. We want to immunize the liability by investing in a combination of 3-year coupon-paying bonds paying 4.50% annual coupons and 11-year zero coupon bonds. (a) What is the price of the 3-year bond? [ Select ] ["None of the other answers is correct", "64.96", "101.39", "101.40", "64.68"] (b) What is the price of the 11-year bond? [ Select ] ["101.39", "101.40", "64.68", "64.96", "None of the other answers is correct"] (c) What is the present value of the liability? [ Select ] ["454,706.65", "None of the other answers is correct", "511,483.14", "509,912.07", "622,297.45"] (d) What is the Macaulay Duration of the 3-year bond (in years)? [ Select ] ["None of the other answers is correct", "11.000", "2.874", "3.000", "10.577"]