Question: Can you please write down the solutions on paper? Don't use excel. Assume the following yield curve for zero-coupon bonds: Maturity 1 year 2 years

Can you please write down the solutions on paper? Don't use excel.

Can you please write down the solutions on paper? Don't use excel.

Assume the following yield curve for zero-coupon bonds: Maturity 1 year 2 years 3 years 4 years 5 years Yield 5% 6% 7% 8% 9% a) (5 Marks) What is Macaulay's duration of each of the bonds? b) (5 Marks) Assume that your investment horizon is 3 years and you want to buy bonds with 1-year and 4-year maturities. What is percentage of 1-year and 4-year bonds to assure a fully immunized portfolio

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