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Part I The only years A liability consists of a payment of $1000 to be paid year from nowe and 4000 to be paid two from now. The only investments available are the following annual Coupon bonds, both redeemable at par fractional amounts of these bonds is available) (Purchasing Maturity ( Years) Effective annual yield Annual Coupon rate 4.8% 5.2% 3.0% 6.5% Par S1000 $1000 2 a a) Calculate the total cost and effective annual yield of declicated (ie absolutely matched) portfolico Part I At the current effective annual de interest rate, two asset portfolios both have present Value 25,450. The Macaulay duration of portfolio 1 is 17.6% and the Macaulay duration of portfolio 2 is 12.52. The first order modificed approximation of the value of portfolio 1 if interest rates decrease 30 busis points is 26,745,46 (6) Calculate the first-order modificed approximation of the value of portfolio 2 if interest rates decrease 30 busis points. Part I The only years A liability consists of a payment of $1000 to be paid year from nowe and 4000 to be paid two from now. The only investments available are the following annual Coupon bonds, both redeemable at par fractional amounts of these bonds is available) (Purchasing Maturity ( Years) Effective annual yield Annual Coupon rate 4.8% 5.2% 3.0% 6.5% Par S1000 $1000 2 a a) Calculate the total cost and effective annual yield of declicated (ie absolutely matched) portfolico Part I At the current effective annual de interest rate, two asset portfolios both have present Value 25,450. The Macaulay duration of portfolio 1 is 17.6% and the Macaulay duration of portfolio 2 is 12.52. The first order modificed approximation of the value of portfolio 1 if interest rates decrease 30 busis points is 26,745,46 (6) Calculate the first-order modificed approximation of the value of portfolio 2 if interest rates decrease 30 busis points