Suppose you are considering investing in a Telus Corp. corporate bond with a $15 000 face value maturing on July 23, 2024. The bond’s coupon or bond rate is 5.05 percent and interest is paid semi-annually. The current required market rate or yield to market (YTM) for a bond of this type is 2.74 percent.

(a) Carefully explain if and why this bond should sell at par, at a premium, or at a discount.

(b) Determine the purchase price or “clean price” for this bond if the purchase was made on July 23, 2018.

(c) Determine the cash price or “dirty price” for this bond if the purchase is instead made on September 28, 2018.