(b) You are a fixed-income portfolio manager in an investment company. Currently, you are considering investing in one of the following treasury bonds: Treasury Bond A has 10 years left to maturity,...

Required:
(i) Calculate the bond durations for Bond A and Bond B respectively using a table format.
Show the formulas and workings in each column.

(ii) Determine the investment decision based on the market expectation and your answer in part (i) above.

Extracted text: (b) You are a fixed-income portfolio manager in an investment company. Currently, you are considering investing in one of the following treasury bonds: Treasury Bond A has 10 years left to maturity, pays 3% coupon annually, and is traded at 5% yield-to-maturity (YTM). Its par value is RM100. Treasury Bond B has 3 years left to maturity, pays 2% coupon semi-annually, and is traded at 3% yield-to-maturity (YTM). Its par value is RM100. You have the following market expectation: The economy will continue to slow down due the Covid-19 pandemic. The Malaysian government may continue to enforce the expansionary monetary policy by lowering the interest rate and reserve requirement.