Consider a bond with a $1,000 face value, six years to maturity, and $40 annualcoupon payments. The bond sells so as to produce a 6% yield-to-maturity.a.What is the selling price of the bond?b.Suppose that the yield-to-maturity remains unchanged at the end of threeyears. At the end of three years, what is the price change relative tothe initial price calculated in (a)?c.Suppose that you hold this bond for three years, and the coupon income isinvested at 4.5% per annum. Three years later, the yield-to-maturity hasdeclined to 5%.(i) What is the price change relative to the initial price found in (a)?(ii) What is the interest earned on the coupon payments over yourthree-year holding period?(iii) What are thethree-year holding periodreturn and the annualized return?