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42ndfonstikcolkge Sectien 2 (30 Marha) Problem 1 ( 6 Marks) a) What is the present value of future eash flows of this bond? e) If

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42ndfonstikcolkge Sectien 2 (30 Marha) Problem 1 ( 6 Marks) a) What is the present value of future eash flows of this bond? e) If the bond is currently trading at $1,080, calculate the YTM? b) What is the price of the bond? e) If the market interest rate unexpectedly decreases, what effect would you expeet this d) Would you buy andor sell? (Explain) decrease to have on the price of the bond? (Please give full explanation)

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