QUESTION FOUR Consider a K1, 000-00, 3 year Corporate Bond issued two years ago for a price of K820-00 and a fixed coupon rate of 10%. The annual coupon is paid at the end of each year. Required: A. If the 12 months yield on similar risky bills is currently at 15%, explain if you would consider buying the bond at K980. [5 Marks] B. If you were told that the yield on 12 months Treasury Bills is currently 14%, explain which one (Bond or Bill) you would consider for a 12 months holding period? [5 Marks] C. Given (b) above, what would be your expected yield if you are willing to buy the bond at K845? [5 Marks] D. Explain the components of the bond's Holding Period Retum (HPR) and comment whether any of them can be negative. [5 Marks] [TOTAL: 20 MARKS] MyCitron