Your portfolio contains 40% of Bond I, 20% of Bond II, 20% of Bond Ill and 20% of Bond IV. Details of the four bonds are given below: $613.91 10-year zero coupon government bond, par value $1000, current price = II. 10-year zero coupon corporate bond, par value $1000, default premium= 2% III. 5 year 15 % coupon corporate bond, par value $1000, annual coupon payments, default premium 9% and YTM for similar government bond is 6% IV. 5 year 15% government coupon bond, par value $1000, annual coupon payments, YTM=6% a) Find the price of Bond II, III and IV, respectively (6 marks) b) Find the Macaulay's duration of Bond I, II, II and IV, respectively (6 marks) c) What is the duration of your portfolio by using your answers in the part (b)? (2.5 marks) d) If you forecast that the yield curve will shift upwards in the near future, how can you adjust your portfolio to minimize the effect on your portfolio? (2.5 marks) e) What is the convexity of Bond 1? If Bond I's yield increases by 1%, what is the price of Bond I based on duration-with-convexity rule? (6 marks) f) Briefly explain how duration and convexity affect your bond investments. (2 marks)