Question 1 The information provided is related to question 1 A-D. You have been provided with information on two bonds in the table below. Assume a face value of all bonds to be R1 000

Bond	Years to Maturity	Coupon	YTM	Reinvestment Rate
A	9	11%	12%	7%
B	17	8%	11%	7%

A) Calculate the price of each bond assuming that coupons are paid annually. (6 marks) B) Calculate the Macaulay duration of each bond. (15 marks) C) Determine the impact on the bond price (according to modified duration) (in % terms) given a 1.5% increase in interest rates. (4 marks) D) Assume that you intend on selling both bonds when Bond A matures (in 9 years time). Applying a re-investment rate of 8%, calculate the future value of the portfolio in 9 years time years as well as the annualised return of the portfolio assuming you hold one of each bond in your portfolio. (25 marks)