Your portfolio contains 40% of Bond I, 20% of Bond II, 20% of Bond II, and 20% of Bond IV. Details of the four bonds are given below: I. 10-year zero-coupon government bond, par value $1000, current price $613.91 II. 10-year zero-coupon corporate bond, par value $1000, default premium 2% II. 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 Bonds I, Ill and IV, respectively. (6 marks) b) Find the Macaulay's duration of Bonds I, II, Il and IV, respectively. (6 marks) c) By using your answers from part (b), what is the duration of your portfolio? (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 minimise the effect on your portfolio? (2.5 marks) e) What is the convexity of Bond I? If Bond I's yield increases by 1%, what is the price of Bond I based on duration-with-convexity rule? (6 marks) Your portfolio contains 40% of Bond I, 20% of Bond II, 20% of Bond II, and 20% of Bond IV. Details of the four bonds are given below: I. 10-year zero-coupon government bond, par value $1000, current price $613.91 II. 10-year zero-coupon corporate bond, par value $1000, default premium 2% II. 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 Bonds I, Ill and IV, respectively. (6 marks) b) Find the Macaulay's duration of Bonds I, II, Il and IV, respectively. (6 marks) c) By using your answers from part (b), what is the duration of your portfolio? (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 minimise the effect on your portfolio? (2.5 marks) e) What is the convexity of Bond I? If Bond I's yield increases by 1%, what is the price of Bond I based on duration-with-convexity rule? (6 marks)