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Compute the price and the yield (IRR) of a BB 3-year bond with a face value of 1,000 that pays an annual coupon of 5%.

Compute the price and the yield (IRR) of a BB 3-year bond with a face value of 1,000 that pays an annual coupon of 5%. The spot interest rates are 0R1=3%, 0R2=3.6%, 0R3 =4.9%, 0R4=5.3% and BB bonds pay a risk premium of 1,25% above AAA bonds. The bonds repayment is at par.

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