Mark Goldsmith's broker has shown him two bonds. Each has a maturity of 5 years, a par value of $10,000, and a yield to maturity of 13%. Bond A has a coupon interest rate of 7% paid semi-annually. Bond B has a coupon interest rate of 15% paid semi-annually.

a. Calculate the selling price for each of the bonds.

b. Mark has $200,000 to invest. Judging on the basis of the price of the bonds, how many of either one could Mark purchase if he were to choose it over the other? (Mark cannot really purchase a fraction of a bond, but for purposes of this question, pretend that he can.)

c. Calculate the yearly interest income of each bond on the basis of its coupon rate and the number of bonds that Mark could buy with his $200,000.

d. Assume that Mark will reinvest the interest payments as they are paid (at the end of each year) and that his rate of return on the reinvestment is only 15%. For each bond, calculate the value of the principal payment plus the value of Mark's reinvestment account at the end of the 5 years.