Innisfail Investment Corporation issued a fifteen (15) year 5% coupon bond that has a face value of $1,000 and a yield to maturity of 9%:

a) Show the time-line for the payments under this bond if the coupons are paid annually.

b) What is the expected price of this bond today?

c) Toodyay Investments is buying a 270-day bank bill today. The bill matures in 270 days time. The bill has a face value of $375 000 and the current market yield on this bill is 3.2% pa. What is the price that Toodyay Investments will have to pay to buy the bill today?

d) Calculate the Effective Annual Rate (EAR) of the Bill?