Securities A, B, and C have the following cash flows: (Ignore taxes)

	Year 1				Year 2				Year 3
A		$	57			$	57			$	57
B			137
C			27				27				127

a. Calculate their durations if the interest rate is 10%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. Suppose that you have an investment of $11.7 million in A. What combination of B and C would hedge this investment against interest rate changes? (Enter your numeric answers as a positive value. Do not round intermediate calculations. Enter your numeric answers in millions rounded to 3 decimal places.)

c. Now suppose that you have a $11.7 million investment in B. How would you hedge? (Enter your numeric answers as a positive value. Do not round intermediate calculations. Enter your numeric answers in millions rounded to 3 decimal places.)