Question $1(2\mathrm{.}5$ marks$)$

In case you bought a $10-$year corporate bond that is selling at par value of $$8,000$ with the coupon of $8\frac{\%}{?}$ year.

a$.$ Define PARs bond and DISCOUNT bond? Use the case figure to give concrete examples of par and discount bonds?

b$.$ If interest rates drop to $7\%,$ will the decrease in market interest affect its PAR or DISCOUNT value?

c$.$ What strategy should bondholders use in order to attract investors to buy each type of these bonds?