This problem requires you to illustrate the concept of immunization. Given the following cash flow stream, the duration is 3 years for a market interest rate of 10%. 1) What is the present value of these cash flows (today's price of a 4 -year bond)? 2) If you pay the price determined in Part 1) above to buy the bond and hold it for a period equal to its duration, that is, 3 years then sell the bond. Assuming that you will reinvest earlier years' cash flows at 10% till Year 3 , what would be the total cash you will receive (that is, the value of your investment) at Year 3 when you sell the bond if the 10% rate remains constant? 3) Suppose that, immediately after you buy the bond, all market interest rates fall from initial 10% to 8% (including your reinvestment rate), what would be the value of your investment (total cash received) at Year 3 when you sell the bond? What about all market interest rates rising from initial 10% to 13% ? Will you receive the similar amount of cash no matter interest rates stay the same, rise or fall after you buy this bond and hold it to its duration