You have constructed a table to calculate the duration of 2 year coupon paying bonds issued by Earth Bank at a yield of 3% pa compounded half-yearly. The bonds have a face value of $135,000 and a coupon rate of 5% pa compounded half-yearly. You printed up the table so that you could take it to a meeting, but unfortunately the final row has been cut off the printout. a) Complete the table. Give your answers as decimals to 4 decimal places. Cash flow 1 2 3 4 D = Amount ($) 3,375 3,375 3,375 years Present value of the cash flow (PVCF) 3,325.1232 3,275.9834 3,227.5699 Weight (PVCF/price) b) Calculate the duration (D) of the Earth Bank bonds using the rounded values in the table. Give your answer in years to 2 decimal places. D = years c) If the yield were to decrease immediately, the duration of the bonds would: increase decrease O remain unchanged 0.0237 0.0234 0.0230 -2 of 3 ID: MF.DI.D.03A A financial instrument provides three future cash flows: 1. $2,886.86 at the end of 3 years 2. $2,520.62 at the end of 7 years 3. $1,270.64 at the end of 12 years Calculate the duration (D) of the financial instrument at a yield of 7% pa compounded yearly. Give your answer in years to 2 decimal places. [1 mark] A portfolio consists of the following two investments: a bond with face value of $100.00 paying annual coupons of 10% maturing in 5 years an annuity with payments of $60.00 at the end of each year for 5 years The portfolio is comprised of 58% bonds and 42% annuities. The term structure is flat and the current yield is 14% pa effective. Calculate the duration (D) of the portfolio. Give your answer to 2 decimal places. D = years