Problem 412 points-peints each part) There is a 5-year corporate bond cuently trading in the market that pays5 percent coupon, with or simplicity coupon payments made once a year at the end of the year with the next coupon paid exactly one year from now). The current price of this bond is $3000 What would be the price of this bond if the market considered this corporation to be free of default risk? Het what would the value of the bond be based on the yield curve on zeros given in Problem above? CE t 51 1,020 1.05 971.412 1020 1.05 #t 1020 1020 + 41020 34 1.054 50 1. -3 30 (958 Price off yr yield carve At the price the corporate bond would be if it where default free e, your answer to part a above, its effective annual yield to maturity should be 03895 (1898). At ts actual market value of $1020, is it's actual yield to maturity higher, lower, or equal to 3.86% Orde one higher than 3.33% lower than 3.896 equal to 3.9% Explain why here: Assume that at a price of $1000, the yield to maturity is 4.544% by the way, I am not saying it is, I'm just telling you to ASSUME that it it ased on a recovery rate of 81, what does the market think the probability of defauit is on this corporate bond? Probability of Defaut 4.544% Show your work below Problem 412 points-peints each part) There is a 5-year corporate bond cuently trading in the market that pays5 percent coupon, with or simplicity coupon payments made once a year at the end of the year with the next coupon paid exactly one year from now). The current price of this bond is $3000 What would be the price of this bond if the market considered this corporation to be free of default risk? Het what would the value of the bond be based on the yield curve on zeros given in Problem above? CE t 51 1,020 1.05 971.412 1020 1.05 #t 1020 1020 + 41020 34 1.054 50 1. -3 30 (958 Price off yr yield carve At the price the corporate bond would be if it where default free e, your answer to part a above, its effective annual yield to maturity should be 03895 (1898). At ts actual market value of $1020, is it's actual yield to maturity higher, lower, or equal to 3.86% Orde one higher than 3.33% lower than 3.896 equal to 3.9% Explain why here: Assume that at a price of $1000, the yield to maturity is 4.544% by the way, I am not saying it is, I'm just telling you to ASSUME that it it ased on a recovery rate of 81, what does the market think the probability of defauit is on this corporate bond? Probability of Defaut 4.544% Show your work below