How much of each bond will you hold in your portfolio

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You are managing a portfolio of $1.9 million. Your target duration is 13 years, and you can choose from two bonds: a zero-coupon bond with maturity 6 years, and a perpetuity, each currently yielding 8%. a. How much of each bond 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 thirteen years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Zero-coupon bond % Perpetuity bond %

Reference no: EM13922210

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