Consider a $100,000 bond issued by the federal government. The bond matures in 20 years and has an annual coupon rate of 9% (interest is paid semi-annually). semi-annually). The interest coupons and the principal of the bond are sold to investors by the brokerage firm The interest coupons and the principal of the bond are sold to investors by the brokerage firm that has purchased a batch of these securities from the issuer. a. If the rate of return required by the market for a 3-year maturity is 10% compounded semi-annually, at what price will the semi-annually, at what price will the interest coupon maturing in 3 years be resold? b. If the market's required yield for a 20-year maturity is 12% compounded semi-annually, what price will the bond's principal (the residual) be resold for? c. An investor buys, at the price you calculated in (2), the principal of the bond and sells it 5 years later when the market yield on this type of security is 10% compounded semi-annually. capitalized semi-annually. What is the effective annual rate of return he will earn on his investment? d. Repeat (3), this time assuming that the principal of the bond will be sold in 5 years and that the required by the market on this type of security will be 14% compounded semi-annually. semi-annually. Consider a $100,000 bond issued by the federal government. The bond matures in 20 years and has an annual coupon rate of 9% (interest is paid semi-annually). semi-annually). The interest coupons and the principal of the bond are sold to investors by the brokerage firm The interest coupons and the principal of the bond are sold to investors by the brokerage firm that has purchased a batch of these securities from the issuer. a. If the rate of return required by the market for a 3-year maturity is 10% compounded semi-annually, at what price will the semi-annually, at what price will the interest coupon maturing in 3 years be resold? b. If the market's required yield for a 20-year maturity is 12% compounded semi-annually, what price will the bond's principal (the residual) be resold for? c. An investor buys, at the price you calculated in (2), the principal of the bond and sells it 5 years later when the market yield on this type of security is 10% compounded semi-annually. capitalized semi-annually. What is the effective annual rate of return he will earn on his investment? d. Repeat (3), this time assuming that the principal of the bond will be sold in 5 years and that the required by the market on this type of security will be 14% compounded semi-annually. semi-annually