CNC Bond has a coupon rate of 5%, with a 10-year maturity period and a par value of RM1,000 and pays coupon annually.

a. What is the price of CNC bond if the current yield is 8%?

b. Shah bought the bond when it still has 8 years of maturity ( the bond was bought after 2 years it was issued). The yield to maturity at the time of purchase is 5%. What is the price of the bond that Shah bought?

c. After 3 years, Shah decides to sell the bond and at the point of sale the yield is 8%. The yield during the investment period is 5%. Provide a detail cash flow from the bond investment in the 3-year period. Calculate the total realized return that Shah obtained from the bond investment.

d. Do you think Shah has made a good decision in selling the bond?