Question 3 (10 marks) a) You are considering buying a bond that matures in 10 years from today. The par value of the bond is $10,000 and the coupon rate is 7%. If the current market interest rates are 5%, what is the bond price today if the coupon is paid annually (4 marks) b) $200,000 U.S. Treasury 8 7/8% bond maturing in 2002 purchased and then settled on October 23, 1992, at a dollar price (clean price) with a yield to maturity of 7.083% with the bond originally being issued at 11/15/1977. Calculate the full(Dirty) price (per unit of the bond).. (6 marks) Question 4 (6 marks) Debt issued by Southwest Airways currently yields 24%. A municipal bond Z of equal risk currently yields 16%. At what marginal tax rate would an investor be indifferent between these two bonds?