Janet and Adam are married and both of them are in their mid-thirties. They have been very conservative with the little money that they managed to save over the years. So far, they have saved RM20,000 at their local bank. With a return of less than 5% on their savings, the couple realizes that they need a more aggressive investment strategy if they are ever going to be able to live comfortably in retirement. They are interested in investing in bonds, but they know very little about their valuation. They have contacted you, an investment advisor to assist them with their investment strategy. You begin the session by discussing the following questions with the couple to familiarize them with bonds: Bond Face Value Annual Coupon Rate Maturity Price A RM1,000 4.0 % 1 year RM990 B RM1,000 7.5 % 17 years RM990 RM1,000 8.5 % 25 years RM990 1. How is the value of any financial asset being determined? 2. Find the value if a 1-year, RM1,000 par value bond with 12 percent annual coupon if the required rate of return is 12 percent. What is the value of a similar 10-year bond? 3. What would be the value of the bonds describe in (2) if investors requires a 15 percent return? A 9 percent return? What happen to the value of the 10-year bond