3. The investment firm of Dakota & Munroe is considering one of the newly issued AAA rated, 10 year, semi-annual, corporate bonds shown below for the client's portfolio: Security & General: Maturity 15 Feb 2031 Coupon 6.00% Price $100 Noncallable CFAL Maturity 15 Feb 2031 Coupon 6.20% Price $100 Currently Callable Call Price $120 A) Suppose that market rates declined by 100 basis points. Contrast the effect of this decline on the price of each bond. (3) B) Should Dakota & Munroe prefer the CFAL over the Security & General bond when rates are expected to rise or fall? (3) c) What would be the effect, if any, of an increase in the volatility of interest rates on the prices of each bond? (4) (10 Points)