Question 3 Cooper and Cooper LLC are currently interested in buying a bond today. It pays a semi-annual coupon of 6% per annum, and has a maturity period of 25 years. The face value of the bond is $100,000. The yield to maturity is 6% per annum. (a) What is the maximum price you would pay for the above bond? [3 marks] (b) If 10 years later, the bond issuer offers you $97500 to repurchase back the bond, will you accept the deal? [2 marks] (c) If interest rates rise to 8%, evaluate its impact on the price of the bond above, compared with a similar coupon bond that has a maturity period of 12 years? [3 marks) (d) What can you conclude about the relationship between price risk and the maturity term of bonds? [2 marks]