7.Today Tim purchased a 15-year, $1,000 face value with 5% coupon rate compounding semi-annually (2.81% coupon rate payable every six month) at yield-to-maturity of 8% compounding semi-annually. Assume Tim would sell his bond in one year when yield-to-maturity would change to 6% compounding semi-annually. Over the one year inflation would be 1.81%.

A) What is the bond price Tim paid today? ____(20)____ B) What would be the bond price Tim would sell in one year?____(21)____ C) What would be the real return of Tims investment if we consider inflation?____(22)____(in percentage, two decimal places, for example 12.43%)