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Question 2 (11%) You are managing a portfolio of $1 million. Your target duration is 8 years, and you can choose from two bonds:

Question 2 (11%) You are managing a portfolio of $1 million. Your target duration is 8 years, and you can choose from two bonds: a zero-coupon bond with maturity of 10 years, and a 10% five- year bond paying annual coupons. Both bonds have a yield of 8%. How much of each bond will you hold in your portfolio?

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