Using the resources at your campus or public library (or on the Internet), select any four bonds, consisting of two Treasury bonds and two corporate bonds. Determine the latest current yield and the promised yield for each. (For promised yield, use annual compounding.) In addition, find the duration and the modified duration for each bond.
a. Assuming that you put an equal amount of money into each of the four bonds you selected, find the duration for this four-bond portfolio.
b. What would happen to your bond portfolio if market interest rates fell by 100 basis points?
c. Assuming that you have $100,000 worth of local currency to invest, use at least three of these bonds to develop a bond portfolio that emphasizes either the potential for capital gains or the preservation of capital. Briefly explain your logic.