Green Pension Fund is attempting to manage one of the bond portfolios under its management....
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Green Pension Fund is attempting to manage one of the bond portfolios under its management. The fund has identified three bonds which have five-year maturities and trade at a yield to maturity of 9 percent. The bonds differ only in that the coupons are 7 percent, 9 percent, and 11 percent. i) What is the duration for each bond? [10] ii) What is the relationship between duration and the amount of coupon interest that is paid? Plot the relationship. [
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