Q4. Tax swap (16%) Suppose that a bank bought $12.5 million in 5-year New York City bonds bearing 6% coupon rate. At that time, the bank would like to take tax swap transaction of selling out the bank-qualified 5-year New York City bonds at $12.0 million and purchasing $12.5 million in 5-year Los Angeles County bearing 8% coupon rate. (Given that federal income tax is 40%) (1) What is loss after tax on the sale of the 5-year New York City bonds? (4%) (2) What is additional annual income after portfolio shifting? (4%) (3) Calculate net present value of portfolio shifting if market interest rate is 8.50%? (8%)