Question: Actuary problem. I provided the answer, please help me to get the answer process. 5. A portfolio consists of a bond with current price 98

Actuary problem. I provided the answer, please help me to get the answer process.

5. A portfolio consists of a bond with current price 98 and duration 5.5, and a second bond with current price 110 and duration 12. (a) Find the duration of the portfolio. (b) Estimate the approximate % increase/decrease in the value of the portfolio if yields (across all maturities) decrease by 1.5%. Answer: (a) 8.94. (b) value increases by about 13.4%

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