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include all work and descriptions NUMERICAL QUESTION: DOLORES has a 5-year Investment horizon. She is considering purchasing an 8 -year, 6% coupon bond (annually). Coupon

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NUMERICAL QUESTION: DOLORES has a 5-year Investment horizon. She is considering purchasing an 8 -year, 6% coupon bond (annually). Coupon payments are paid every six months and the bond has a face value of Cl,000. The bond sells to offer a yield to maturity of 6% annually and therefore its price is Cl,000. DOLORES expects to be able to reinvest the coupon payments at an annual interest rate of 5%. At the end of the planned investment horizon, the bond will be selling to offer a yleld to maturity of 5% annually. 1. What is the interest-on-interest amount to the closest cent? (25 marks) 2. What is the annual Total Return for DOLORES' investment on a bond equivaient basis? (35 marks) Remember to input your answer without the \% sign. For instance, an answer equal to 1.52\% should be entered as 1.52 3. What is the annual Total Return for DOLORES' investment on an effective basis? (40 marks) Remember to input your answer without the \% sign for instance, an answer equal to 1.52% should be entered as 1.52

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