AgriTech Innovations Ltd., a leading agricultural technology company in Bangladesh, has issued an 8- year bond with a face value of BDT 1,200. The bond features a coupon rate of 3.8%, paid semi-annually. In the current market, the yield from comparable investments is 4.2%.

a. What should be the fair value of AgriTech's bond, considering its current risk and return

scenario?

b. What would be the bond's value if the market yield decreases to 3.6% from the current rate.

Provide a rationale for this change.