In September, Company PQR (PQR) priced a 3.6% coupon bond maturing on September 17th, 2031. The bond was issued with a yield to maturity of 3.636%, with first settlement on September 17th, 2021.

The yield of the new bond was calculated based on a credit spread of +217 bps over the interpolation of the CAN 2.25% June 1, 2031 and CAN 5.75% June 1, 2034 bonds. All bonds use the actual/365 day count and are semi-annual pay.

a) (5 marks) What was the price of PQRs bond at the time of issuance to 3 decimal places? Solve for price by calculating the present value of cash flows associated with the bond. Show all work

b) (10 marks) The CAN 2.25% June 1, 2031 bond had a price of 107.13 with a yield of 1.459% when PQR priced their new bond. What was the yield of the CAN 5.75% June 1, 2034 when PQR priced their new bond? Show all work

c) (10 marks) What was the clean price of the CAN 5.75% June 1, 2034 (3 decimal places) when PQR priced their new bond? Solve for price by calculating the present value of cash flows associated with the bond. Show all work