8. The Canadian government decided to issue a consol (a bond with a never-ending interestpayment and no maturity date). The bond will pay $50 in interest each year (at the end of theyear), but it will never return the principal. The current discount rate for Canadiangovernment bonds is 6.5%. What should this consol bond sell for in the market? What if theinterest rate should fall to 4.5%? Rise to 8.5%? Why does the price go up when interest ratesfall? Why does the price go down when interest rates rise? 9. Your broker faxed to you the following information about two semiannual coupon bonds thatyou are considering as a potential investment. Unfortunately, your fax machine is blurringsome of the items, and all you can read from the fax on the two different bonds is thefollowing: IBM Couon Bond AOL Couon Bond$1,000 $1,000 9.5%20—— $68914 Fill in the missing data from the information that the broker sent. 10. Five years ago Thompson Tarps, Inc. issued twenty-?ve-year 10% annual coupon bonds witha $1,000 face value. Since then, interest rates in general have risen, and the yield to maturityon the Thompson Tarps bonds is now 12%. Given this information, what is the price todayfor a Thompson Tarps bond? a. $843.14b. $850.61c. $1,181.54 d. $1,170.27