6. [18 points] There is a variety of financial assets available in the market. Please answer the following questions related to different financial asset. (1) Consider a coupon bond issued today that pays interest semi-annually with a par value of $1,000, 5 years maturity, and a yield to maturity of 5%. The coupon rate is 4%. (i) what is the price of the bond today? Is it sold at premium, discount, or par value? (5 points) 9 (ii) If one year later, the yield of the bond decreases to 4%. What is the bond price then? (3 points) (iii) What is current yield on this bond over the first year? (2 points) (2) Consider a value-weighted index. The index value is 120 on Day 1 and 105 on Day 2. If you rescale the value on Day 1 to 100, what should be the new index value on Day 2? (2 points) (3) HSBC has written a call option to you on one share of XYZ stock. The strike price of the call option is $200, and the call premium is $10. If the stock price drops to $190, will you exercise this option? What will be the dollar gain/loss to HSBC? (4 points) (4) You have purchased shares of Low-Tech Company. The company has an expected ROE of 10%. If the firm follows a policy of paying