Suppose that the yield curve is currently flat at 4%. Consider a 2 -year Coupon Bond with a coupon rate of 5% and annual coupons payments. You have a $100,000 liability due in one year. a) What is the price of the 2-year bond (per $1,000 par value)? b) What is the duration of the bond? c) You want to immunize your liability against parallel shifts in the yield curve by investing in cash (duration=0) and the 2-year coupon bond. How much of the portfolio value (in percent) would you need to invest in the coupon bond? d) Suppose that the yield curve shifts up in parallel by 1% to a level of 5%. Based on the duration, predict how much the prices of the cash investment, 2-year bond and the liability change (as a percentage of their current price) Suppose that the yield curve is currently flat at 4%. Consider a 2 -year Coupon Bond with a coupon rate of 5% and annual coupons payments. You have a $100,000 liability due in one year. a) What is the price of the 2-year bond (per $1,000 par value)? b) What is the duration of the bond? c) You want to immunize your liability against parallel shifts in the yield curve by investing in cash (duration=0) and the 2-year coupon bond. How much of the portfolio value (in percent) would you need to invest in the coupon bond? d) Suppose that the yield curve shifts up in parallel by 1% to a level of 5%. Based on the duration, predict how much the prices of the cash investment, 2-year bond and the liability change (as a percentage of their current price)