7. (20 points) Dasan Corporation were to issue and sell a bond with face value $1,000 and a year to maturity. The coupon will be paid quarterly. The zero rates per annum with quarterly compounding estimated by using the prices of bonds having similar level of risk in the market are as in the following table. a) (10 points) What should be the annual coupon rate to make this bond worth the face value? (Describe the calculation process as well.) b) (5 points) What is the YTM if the face value becomes the market price? Answer it with brief explanation. c) (5 points) Suppose three months has gone by from the time when the bond was issued and sold at the face value. The market interest rates have increased so that the market price of the bond issued three months ago has now become $994.04. Which of the following is now the bond's YTM? Check the correct one. (1) 7.24% (2) 7.84% (3) 8.83% (4) 10.56%