3. (10pt) A EU corporation issues a 5-year coupon bond with face value $1000, redemption at par and annual coupons at 3% coupon rate. The prevailing yields in the market at the time of the issuance are 2%. Compute the price of the bond at issuance. Compute the duration of the bond at issuance. Assume a US investor who bought the bond at issuance when the exchange rate was :$=106 and kept it till maturity reinvesting the coupons in a European bank at 2% annual rate. Compute the effective yield obtained by the US investor a) in the case the exchange rate stays constant during the investment period b) in the case the euro appreciated of 1% over the entire investment period