Question 3 In order to ensure the profitability of company, you are required to advise on the position of a diversified portfolio. Your task is to explain to the management team on the bond sensitivity, which requires you to: (a) Calculate the duration of a four-year, $2,000 Treasury Bond with a 8 per cent semi- annual coupon selling: (i) at par? (4 marks) (ii) selling with a yield to maturity of 15 per cent? (4 marks) (b) Conclude on the relationship between the duration and yield to maturity based on part (a) results. (2 marks) (Notes: Please select consistent decimal point for the calculation of PVIFi,n in the financial table.) [Total: 10 marks)