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You have constructed a table to calculate the duration of 2 year coupon paying bonds issued by Earth Bank at a yield of 3% pa compounded halfyearly. The bonds have a face value of $135,088 and a coupon rate of 5% pa compounded halfyearly. You printed up the table so EA that you could take it to a meeting, but unfortunately the nal roy.I has been cut off the printout. B 15 a) Complete the table. Give your answers as decimals to 4 decimal places. Present value of Amount Weight Cash flow the cash flow . ($1 (Pym (WCFrpnae) 1 3,325.1232 0.023? 2 3,2?5.9834 0.0234 3 3,22?.5699 0.0230 4 | | | IJ) Calculate the duration (D) of the Earth Bank bonds using the rounded values in the table. Give your answer in years to 2 decimal plaoes. c} If the yield were to decrease immediately, the duration of the bonds would: 0 increase 0 decrease 0 remain unchanged :l [1 mark] A nancial instrument proyides three future cash ows: 1.$2,886.86 at the end of 3 years 2. $2,520.62 at the end of In" years 3. $1,2?D.64 at the end of 12 years Calculate the duration (D) ofthe nancial instrument at a yield of 2% pa compounded yearly. Give your answer in years to 2 decimal places. D = E years A portfolio consists of the following two investments: a bond with face value of $100.00 paying annual coupons of 10% maturing in 5 years an annuity with payments of $60.00 at the end of each year for 5 years The portfolio is comprised of 58% bonds and 42% annuities. The term structure is flat and the current yield is 14% pa effective. Calculate the duration (D) of the portfolio. Give your answer to 2 decimal places. D = years