Question: Please show full solution 5 . Bond A has a price of $900, a duration of 4.8 years and a yield of 3.2% compounded semiannually.

Please show full solution 5 . Bond A has a price

Please show full solution

5 . Bond A has a price of $900, a duration of 4.8 years and a yield of 3.2% compounded semiannually. Bond B has a price of $1,100, a duration of 6.8 years and a yield of 4% compounded semi-annually. (a) Estimate the relative (i.e. percentage) change in the value of bond A, assuming its yield falls to 3% compounded semi-annually. (b) My portfolio consists of four units of Bond A and five units of Bond B. What is the duration of my portfolio

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