You are managing a portfolio of $1.0 million. Your target duration is 25 years, and you can choose from two bonds: a zero-coupon bond with maturity five years and a perpetuity, each currently yielding 2%. Required:

a. How much of (i) the zero-coupon bond and (ii) the perpetuity will you hold in your portfolio? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. How will these fractions change next year if target duration is now twenty four years? (Do not round intermediate calculations. Round your answers to 2 decimal places.)