Suppose your firm has an obligation to pay $500,000 in one year, $600,000 in two years, and $700,000 in three years. It has valued this using a risk-free rate according to the current Treasury yield curve, which is flat at 4%. The duration of this obligation is given at 2.085 years, and your firm has purchased risk-free zero-coupon bonds that mature in 2.085 years to fund and immunize the obligation. If the yield curve immediately shifts to a flat 3.90%, what will be the net position (that is, the difference between the present values of the obligation and bonds)? Is the obligation now under- or overfunded? Is this a material amount?

No Excel answers, please.