$5$ A portfolio manager at United Sisters Inc. is structuring a fixed$-$income portfolio to meet the objectives of a US

client. The portfolio manager compares coupon U$.$S$.$ Treasuries with zero coupon stripped U$.$S$.$ Treasuries and observes

a significant yield advantage for the stripped bonds.

Briefly discuss why zero coupon stripped U$.$S$.$ Treasuries could yield more than coupon U$.$S$.$ Treasuries with the same

final maturity.

$6$ Discuss Duration. Include in your discussion what duration measures, how duration relates to maturity, what

variables affect duration, and how duration is used as a portfolio management tool $($include some of the problems

associated with the use of duration as a portfolio management tool$).$