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Suppose you buy a 3-year corporate bond of $1,000,000 (i.e. you lend $1,000,000 to the corporation issuing the bond) with a coupon interest rate of

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Suppose you buy a 3-year corporate bond of $1,000,000 (i.e. you lend $1,000,000 to the corporation issuing the bond) with a coupon interest rate of 3.5% per annum. a. If the bond is annual pay, how often do you receive interest? (1 point) b. List the cash flows you receive from the bond each year. (3 points) After: 1st year: $. 2nd year: $. 3rd year: $ C. If this bond has a yield of 4.0% per annum, . What is its percentage-of-par price? (Use decimal form for the calculations: C = 0.035, y = 0.040, principal = 1.0 - you will get a decimal answer, then convert that to percentage with two decimal points XX.XX%) (4 points) ii. Using that percentage-of-par price what would you pay to buy the $100,000 bond? (1 point)

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