Emaar PLC issues the Yas Islands 2030 Beach Villa bond. The bond has a par value of AED 3,700 and pays a coupon of AED 500. Suppose the Emaar PLC Yas Islands 2030 Beach Villa bonds price is AED 3,000,.

a) Determine the bonds coupon rate [3 Marks]

b) Calculate the bonds current yield [3 Marks]

c) Is the Emaar PLC Yas Islands 2030 Beach Villa bond a par value, discount or premium bond? Explain.

[3 Marks]

d) Briefly explain the effect of an increase in inflation premium on the bonds pric