Australian government bond series FR75 is due 20 years from now with coupon 7.5% p.a. and paid semiannually. Ignore the income tax on bond coupons. a. If investors require 8.5% yield for this bond, what is the FR75 price? (6 points) b. If a broker offers the FR75 at 92, are you interested to buy it? Explain. (2 points) c. If a year later the bond yield does not change, without computing, determine whether FR75 price will increase, decrease, or remain the same? Explain why. (2 points) d. If you buy the bond at 92 and a year later sell it at 93, compute your investment return in a year (assume the interest on reinvestment is 6% p.a.). (5 points) Below is the data on government bonds that you get from your bond broker on October 4, 2018. Series Maturity Date Coupon Offer YTM Offer Mduration Series Maturity Date Coupon Offer YTM Offer Mduration FR0069* 15-Apr-19 7.875% 100.60 6.69% 0.49 FR0070 15-Mar-24 8.375% 100.00 8.37% 4.28 FRO036 15-Sep-19 11.500% 104.00 7.03% 0.89 FR0077 15-May-24 8.125% 99.50 8.24% 4.30 FR0031 15-Nov-20 11.000% 106.75 7.47% 1.81 FR0044 15-Sep-24 10.000% 108.00 8.27% 4.47 FRO034 15-Jun-21 12.800% 112.10 7.72% 2.22 FR0040 15-Sep-25 11.000% 114.25 8.26% 4.94 FR0053* 15-Jul-21 8.250% 100.75 7.94% 2.40 FR0037 15-Sep-26 12.000% 121.25 8.29% 5.34 FRO061" 15-May-22 7.000% 97.00 7.97% 3.04 FR0056* 15-Sep-26 8.375% 100.25 8.33% 5.70 FRO035 15-Jun-22 12.900% 115.00 8.11% 2.89 FR0059* 15-May-27 7.000% 91.15 8.47% 6.05 FR0043 15-Jul-22 10.250% 106.75 8.13% 3.06 FR0042 15-Jul-27 10.250% 111.75 8.33% 5.80 FR0063* 15-May-23 5.625% 90.50 8.14% 3.84 FR0047 15-Feb-28 10.000% 110.50 8.36% 6.12 FR0046 15-Jul-23 9.500% 105.25 8.15% 3.75 FR0064* 15-May 6.125% 85.40 8.36% 6.72 FR0039 15-Aug-23 11.750% 114.25 8.14% 3.71 FR0071 15-Mar-29 9.000% 103.70 8.46% 6.73