4. Company XYZ issued a callable bond 3 years ago. The bond has a face value of $1,000 with 7% coupon rate (semi-annual payment). The current market price of the bond is $1,093 and the bond has 12 years left until maturity. a. If you purchase the bond now and the bond is not called, what is your yield to maturity? b. If you purchase the bond now and the bond is called in 2 years at a call price of $1,035, what will be your yield to call? 3. Here is data of stock A and Stock B in the table below: Stock A B Standard Deviation 35% 37% Beta 0.9 0.5 Please answer the following question based on the information above. 1) Which stock has a higher total risk (stand-alone) risk? How much is it? 2) Which stock has a higher market risk? How much is it? 3) Which stock would have a higher required return? Why? 5. Please answer to following two questions: a) If the market interest rate decreases, how will it impact the market price of a bond? b) Do long-term bonds have higher price risk than short-term bonds? Please illustrate your point by comparing the price change of a 1-year bond vs. a 20-year bond due to interest rate changes. Assume both bonds have $1000 par and $100 annual coupon payment