You are managing a portfolio of $1.9 million. Your target duration is 13 years, and you can choose from two bonds: a zero-coupon bond with maturity 6 years, and a perpetuity, each currently yielding 8%.

a.How much of each bond will you hold in your portfolio?(Do not round intermediate calculations.Round your answers to 2 decimal places.)

Zero-coupon bond %

Perpetuity bond %

b.How will these fractions changenextyearif target duration is now thirteen years?(Do not round intermediate calculations.Round your answers to 2 decimal places.)

Zero-coupon bond %

Perpetuity bond %