QUESTION 1 Assume annual compounding and that the yield curve is flat at 5.50% pa nominal. Suppose we have a liability of $850,000 due in exactly 5 years' time. We want to immunize the liability by investing in a combination of 3-year coupon-paying bonds paying 7.00% annual coupons and 8- year zero coupon bonds. (a) What is the price of the 3-year bond? Select] (b) What is the price of the 8-year bond? (Select] (c) What is the present value of the liability? (Select] (d) What is the Macaulay Duration of the 3-year bond (in years)? (Select] > (e) What is the Macaulay Duration of the 8-year bond (in years)? (Select] (f) What is the Macaulay Duration of the liability (in years)? (Select] (g) What is the first equation in the system of equations that needs to be solved to find the immunizing portfolio, where q_Z is the number of zero-coupon bonds and q_C is the number of coupon-paying bonds in the immunizing portfolio? (Select] (h) What is the second equation in the system of equations that needs to be solved to find the immunizing portfolio, where q_Z is the number of zero-coupon bonds and q_C is the number of Select 1 counon naying honds in the immunizing nortfolio