You are managing a portfolio of $2.7 million. Your target duration is 15 years, and you can choose from two bonds: a zero-coupon bond with maturity 10 years, and a perpetuity, each currently yielding 5%.

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 fourteen years?(Do not round intermediate calculations.Round your answers to 2 decimal places.)

Zero-coupon bond. _________%

Perpetuity bond. __________%