DEF Ltd's bonds are selling today at a $40.20 discount based on a face value of $1,000. They have a 6.50% coupon rate, pay semi- annual coupons and will mature in 10 years. If DEF were to issue similar bonds today, what will be its coupon rate if they are sold at par and mature in 10 years? a. 8.48% b. 6.50% O C.3.53% d. 7.07% e. 8.07% Evaluate the following statements with respect to bonds. 1. Bonds rated as "AAA" would generally have a lower default risk than bonds rated as "A". II. Bonds of a new corporation would likely have a higher default risk than that of an established corporation. III. All bond investors should choose secure bonds issued by governments over high yield (junk) bonds. O a. All statements 1. ll & Ill are correct O b. Only statement is correct. Oc Only statement il is correct. O d. Only statement illis correct. e. Only statements I & II are correct