You are managing a portfolio of $3.0 million. Your target duration is 10 years, and you can choose from two bonds: a zero-coupon bond with maturity 8 years, and a perpetuity, each currently yielding 10%.

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

Zero-coupon bond: _______%

Perpetuity bond: _______%