Question Three a. Amina is considering investing in two bonds with the following characteristics (par value of both bonds is sh. 1000) Bond A-10% coupon (annual), 5 years to maturity Bond B-zero coupon bonds, 10 years to maturity Required: i. Assuming the market yield on both bonds is currently 8%, calculate the prices of these two bonds. ii. Assuming the market yield of 8% calculate the durations of each of these bonds. iii. Suppose you manage fixed investment for Tana River Fund; you know that the fund has commitment to pay out Sh. 10,000,000 seven years from today. Based on your answers to parts (i) and (ii) above, calculate the positions you would take today in bonds A and B that would immunize the fund against interest rate risk during the next seven years. iv. How many of each of these bonds would you need to buy today to hedge your Sh. 10,000,000 liability against interest rate risk? Question Four a. Select any four money market investment vehicles and briefly explain the main features of the selected vehicles. b. How do you differentiate between a good investment and a scam in Kenya c. With reference to the measurement of portfolio risk, distinguish between Portfolio theory and the Capital Asset Pricing Model (CAPM)