Gregory House won the lottery, and some funds of it he wants to invest in his favourite city, thus he is planning to invest in municipal bonds that Canterbury has released. Canterbury has released 10,000 tax-exempt bonds with a yield of 3.9%, and a face value of 100. His friend James Wilson heard about it and in all seriousness said that this is a mistake and that he should invest in a regular taxable bond that yields 4.55%. Both bonds mature in 4 years. The marginal tax rate in Canterbury is 25% for investments up to 1,090,000 and 35% for investments larger than 1,090,000. The market yield is constant at 4%, the coupon is paid annually.

(i) How much does House need to spend in USD($) so that the municipal bond would be more attractive, and what is the outcome of this endeavour? The exchange rate is 1.32$ for 1 (this rate includes transaction costs). Show the workings of your answer in full. Discuss some of the immediate risks this investment is facing (at least 2).

(ii) A similar coupon that House could invest in has the following characteristics: payments take place on 10 April and 10 October. The bond matures on 10 October 2025. It has the 30/360 conversion. Dwayne has planned to sell the bond on the 16th of June 2023. Find for that settlement date: (a) The dirty price

(b) The accrued interest

(c) The clean price