Jennie purchased a 5.25% 10-year semi-annual coupon bond newly issued by Qantas Airline (an Australian listed company) on 9 Sep 2020 for $98.936, each bond with a face value of $100. She planned to hold the investment for one year.

• On the bond investment date of 09 Sep 2020, Jennie also purchased a one-year credit default swap contract (CDS) on her Qantas bond, in hopes of minimizing her interest rate risk on the bond investment. Below is a snapshot of Qantas CDS trading information for that day. Its annual CDS bid and ask price is a percentage of the bond's face value of $100, expressed in bps (100 bps = 1%). The CDS premium is to be paid one year after CDS buyers' purchase date.

  CDS date	Bid Price	Ask Price
  09 Sep 2020	95.992 bps	117.013 bps

• Today is 9 September 2021, and Jennie decides to sell the bonds as soon as she receives payment on the coupon. The current yield on the bond is 3.565% after the coupon payment.

Requited:

1. What is the realized return on the investment for this one-year period after considering the CDS premium payment? Assume the reinvestment return on coupons is 2% p.a. compounded semi-annually. [Explain steps taking to get the answer. Then show your working and do not round the intermediate calculation. Round your final answer to 2-decimals e.g., 0.01%]
2. Comment on Jennies CDS strategy. [Hint: no calculation is required. Word limit: 60]
3. If the bonds were callable and the market expects the Reserve Bank of Australia to raise interest rates soon, should Qantas' bondholders be concerned that the bonds will be redeemed early (i.e., before the bond's maturity date)? Provide your answer and explain. [Word limit: 60]