Question: Problem 4 (3 points]: Consider 1-factor parallel yield shift model with a flat structure of forward rates y. Assume currently y=3%. How many 5-year zero-coupon

Problem 4 (3 points]: Consider 1-factor parallel yield shift model with a flat structure of forward rates y. Assume currently y=3%. How many 5-year zero-coupon bonds you need to sell to hedge a portfolio of 1000 of 9-year zero-coupon bonds. Round your answer to the nearest integer number of bonds Problem 5 (4 points]: Consider the following three securities: Security name Duration A1 How you can use securities A2 and A3 to hedge a portfolio that consists of 5,000 securities A1? Find the number of A2 and A3 you will want to buy or sell and round your answer to the nearest integer number

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