A portfolio manager buys $20 million par value of a 15-year bond that promises to pay 10% interest ratio per year. The reinvestment rate per period is 8%.

A) Show that the economic profit of investing in the bond at the market price is 0

B) What will be the excess return in part A

C) Show that at the yield of 8%. The investment in the bond will grow at the annual rate of 8%

D) Calculate the Capital Gain Rate if the bond is bought at the market price