Question: please type the answer by computer, so i can see it clearly, thank you!!! Question: You will further your studies on postgraduate degree in Fintech.

please type the answer by computer, so i can see it clearly, thank you!!!

Question:

You will further your studies on postgraduate degree in Fintech. Your parents need to pay $550,000, $600,000 and $650,000 at the end of next 3 years respectively.

1(a) If the market interest rate is 4% per annum, what will be the duration of the payment obligation?

1(b) Your parents are planning to fully fund the obligation using both 6-month zero coupon bonds and perpetuities. Determine how much each of these bonds (in market value) they will hold in the portfolio.

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