Question 3 Bond Valuation and Yields (4 marks) (Parts in Question 3 are not related to each other.) A 3-year maturity, 5% coupon bond paying coupons annually is currently selling at par of $1,000. (a) If one invests in this bond until maturity and the reinvestment rate is 6% per year, what is the realized compound retum for this bond investment? Explain whether the yield to maturity for the bond is bigger or smaller than the realized compound return for this bond investment, and why. (2.5 marks) Click and type your answer. (b) If the yield to maturity of a 5-year zero-coupon bond is up by 75 basis points from 2.25% to 3.00% immediately after the purchase of this bond, what is the percent change in the value of this bond? (1.5 marks) Click and type your