You are given the following information on annual coupon paying bonds:

Term	Coupon rate	Face value	Zero coupon yield r(0,t)
1	2.00%	1,000	3.00%
2	4.00%	1,000	5.00%
3	7.00%	1,000	6.00%

You have incurred a liability, which has the following cash flows (end of year):

Year	1	2	3
Liability CFs	600	1,500	3,500

Using the information above, calculate the following:

1. The price of each bond, and the present value of the liability cash flows.
2. The yield to maturity of each bond and the liability cash flows (HINT: a financial calculator or excel will be required for this)
3. Construct an asset portfolio that is cash flow matched with the liability, stating specifically the dollar amount of each bond you need to invest in.