Question: Please explain with solution. Thanks! Problem 11-19 (Algo) You are managing a portfolio of $1.0 million. Your target duration is 31 years, and you can

Please explain with solution. Thanks!

Problem 11-19 (Algo) You are managing a portfolio of $1.0 million. Your target duration is 31 years, and you can choose from two bonds: a zero-coupon bond with maturity five years and a perpetuity, each currently yielding 2%. Required: a. How much of (1) the zero-coupon bond and (ii) the perpetuity will you hold in your portfolio? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Zero-coupon bond Perpetuity bond % b. How will these fractions change next year if target duration is now thirty years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Zero-coupon bond Perpetuity bond % %

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