Question 2 [16 marks] Wan purchased a 7-year Treasury bond with a coupon rate of J2-4.5% pa. and a face value of $100 that matures at par and is subject to a 30% tax on interest and capital gain. The purchase price was S94.230 a. [2 marks Use the approximate bond yield formula to estimate the net yield rate. Give your answer in j2 form, rounded to 3 decimal places. b. [4 marks Use linear interpolation to calculate the net yield rate. Give your answer in J2 form, rounded to 3 decimal places. Hint: 1.9% per half year and 2% per half year are the lower bound and the upper bound for the net yield rate. c. 15 marks! Recalculate the bond price if the net yield rate is J2-4.3% p.a. and all tax payments (interest tax payments and capital gain tax payment) are delayed by half year. Round the result to 3 decimal places d. [5 marks] Wan decides to hold this bond to maturity. Over the seven years the before-tax reinvestment rates he earned are shown in table 1. Calculate Wan's total realised compound yield rate if he has received a tax exemption and so does not need pay the taxes for this bond. Assume that Wan purchased this bond at a yield rate of J2-4.3% p.a. and the purchase price was $101.20 Give your answer in j2 form, rounded to 2 decimal places. Table 1: Annual reinvestment rates Year 1-Year 2 | J2-4.3% p.a. Year 3 Year 7 | J2-4.7% p.a