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You are managing a portfolio of $1,0 million Your target duration is 12 years, and you can choose from two bonds: a zero-coupon bond with

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You are managing a portfolio of $1,0 million Your target duration is 12 years, and you can choose from two bonds: a zero-coupon bond with maturity five years, and a perpetuity, each currently yielding 5% a. How much of the zero-coupon bond and the perpetutty will you hold in your portfolio? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Zero-coupon bond Perpetuity bond %6 . How will these fractions change next year if target duration is now eleven years? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Answer is not complete. 0.50 Zero-coupon bond Perpetuity bond

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