Let PA (i) represent the present value, at an annual effective rate of interest i , of a 5-year fixed interest bond paying coupons of 7% p.a. annually in arrears and redeemed at 103%. Let PB (i) represent the present value, at an annual effective rate of interest i , of a 3-year fixed interest bond paying coupons of 8% p.a. half-yearly in arrears and redeemed at par. (a) Calculate exactly PA (0.06) and PB (0.06) . (b) Calculate