5. (10 points) You work for a U.S. investment company, Petty and Campbell, that seeks U.S. dollar returns but is willing to take some foreign exchange risk. You are negotiating the purchase of a new Euro bond issue of Dusseldorf Industrial. The issue is for 50,000,000. It has a maturity of 3 years, is to be issued at par today, and will pay 4,000,000 interest annually. You forecast the spot rate to be 0.8610/S at the end of the first year, 0.8545/S at the end of the second year, and 0.8480/$ at the end of the third year. The current spot rate is 0.87/S. a) What dollar price would you be willing to pay for the issue today if you wanted to obtain a 8% YTM in dollars, and were positive of the forecasts? b) At today's spot rate, how much would it cost you in euros? c) Why would you be willing to pay more or less than its par value in euros