solve the two problems

1. Define the concept of the bond duration and discuss its application to bond price volatility. Is a 3 - year, 10% bond more volatile than a 50-50 mix of a 2-year, 10% bond and a 4-year, zero-coupon bond? Why or why not? Assume that the current market interest rate is 10 percent.

Draw the prot line for each of the following individuals, assuming S = $100, E = $100, and C = P = $10 in all cases, unless otherwise stated: a) The person who buys a stock and buys a put on it. b) The person who buys a call and sells a put on the same stock. 0) The person who simultaneously buys a call and a put on the same stock. (1) The person who buys a call and sells another call with a higher exercise price on the same stock