a) Your client, Sally Smith, decided to purchase a German corporate bond last year. At the time of purchase, this semi-annual bond had 10 years remaining to maturity, a coupon rate of 6.3% and a Yield to Maturity of 5.1%. If the bond has a par value of 5000, how much did Sally Smith pay for the bond originally, in Euros?

b) At the time of the purchase, the exchange rate was 1 to $1.25. The Euro has weakened since then, causing the exchange rate to decline. The current exchange rate is 1 to $1.13. Meanwhile, the bonds price has risen to 5,700. How much, in U.S. dollars, did Mrs. Smith originally pay for the bond? How much is the bond worth today in U.S. dollars? If she sold the bond today, what is her total U.S. dollar capital gain or loss?