As a financial analyst, you are evaluating a potential investment in a bond that has a face value of $10,000 and a coupon rate of 6%. The bond has 5 years to maturity and pays coupons semiannually. The current market interest rate is 8%.

a. Your company has given you $30,000 to invest in these bonds. Calculate the current price of the bond and determine in how many bonds you would be able to invest. (20 marks)

b. Suppose you are a financial analyst, and you are evaluating two different assets, Asset A and Asset B, to add to your investment portfolio. You have estimated the expected returns and betas for the two assets as follows: Asset A has an expected return of 12%, and a beta of 1.3. Asset B has an expected return of 8%, and a beta of 0.9. Assuming that the risk-free rate is 2.5% and the expected return on the market is 10%, what would be the required return for each of these assets? (20 marks)

c. Your company intends to diversify its assets by investing in the stock market, and it has given you the opportunity to manage these investments. As previous investments of the company were affected by the Russia-Ukraine war, minimising risks is a must. Considering that Ukraines main export is cereals and agricultural products, and Russias main export is fossil fuels such as natural gas, you are considering investing among four different sectors: agriculture, fishing industry, technology and human capital industry (such as education companies). What would be your investment strategy? Justify your answer. (10 marks)