Bonus Problem 2 (Optional, 25 marks) There are 3 bonds available in the market. The information of these 3 bonds is summarized in the following table: Time to Annual coupon Face value maturity rate (Frequency) Bond A 2 years Zero coupon 100 Bond B 4 years 6% (annual) 100 Bond C 8 years 3% (annual) 100 We assume that the term structure is flat and the annual effective interest rate is currently 5%. An investor has $10000 currently and wishes to invest his wealth for 5 years. The investor decides to invest the capital into these 3 bonds. To minimize the potential interest rate risk, the investor constructs the portfolio such that the internal rate of return of the investment can be maintained at 5% (or at least 5%). Determine the best portfolio. Provide full justification to your answer. Bonus Problem 2 (Optional, 25 marks) There are 3 bonds available in the market. The information of these 3 bonds is summarized in the following table: Time to Annual coupon Face value maturity rate (Frequency) Bond A 2 years Zero coupon 100 Bond B 4 years 6% (annual) 100 Bond C 8 years 3% (annual) 100 We assume that the term structure is flat and the annual effective interest rate is currently 5%. An investor has $10000 currently and wishes to invest his wealth for 5 years. The investor decides to invest the capital into these 3 bonds. To minimize the potential interest rate risk, the investor constructs the portfolio such that the internal rate of return of the investment can be maintained at 5% (or at least 5%). Determine the best portfolio. Provide full justification to your