Show the relevant present value equation for each answer. For each answer, provide one or two brief sentences explaining your result. Correct calculations but without explanations will be marked down. Be careful with space; you may want to use a smaller font for the equations. Investors are evaluating two 6-year bonds at time t in an emerging financial crisis setting where there is a strong likelihood of default. Assume the following values for the expected probability of default (z) of the two bonds, issued respectively by companies A and B. t+1 t+2 +3 t+4 t+5 t+6 A 0.1 0.2 0.3 0.3 0.4 0.3 B 0 0.2 0.6 0.7 0.3 0.25 a. Assume both bonds are 6-year, 8% coupon, $1000 face value coupon bonds, each selling for $1000. Calculate the yields on the two bonds. Which is higher? b. Now assume a setting where all future interest rates are exogenously fixed at 6%; the prices of the bond are now to be determined. What are the prices of bond A and B? Which is higher? c. With respect to (6) above, and taking both present value streams together, does there exist some value for i that would make the price of Bond A equal to the price of Bond B? For each of the 3 parts, display the appropriate present value equation and give a brief one or two-line explanation of the logic of your results. Answers should be exact and it is best to find an appropriate program/calculation method. (b) can be done by hand and (c) can in principle be done by trial and error, but you will find this very cumbersome. (a) cannot be done by hand