This morning (9 June 2021) Sulaiman purchased a j2 =5% p.a. Australian Treasury bond, maturing on 9 June 2031. Sulaiman is liable for 25% tax on interest and capital gains. Assume such tax is paid immediately on receipt of taxable funds.

a. [2 marks] Draw a carefully labelled cash flow diagram, from Sulaimans perspective, that models this transaction.

b. [1 mark] If Sulaimen paid $87.750 (per $100 face value) to purchase this bond, give the approximate yield on the transaction, using the bond salespersons formula. For the purposes of this calculation, ignore all tax. Give your answer as an annual (j2) rate.

c. [2 marks] If Sulaimen paid $87.750 (per $100 face value) to purchase this bond, calculate the approximate yield on the transaction, using linear interpolation. For the purposes of this calculation, ignore all tax. Give your answer as an annual (j2) rate.

Sulaimen has developed the spreadsheet you see in figure 1 to calculate the yield on the transaction, allowing for tax.

d. [3 marks] Give the cell formul for cells C3:H4. e. [2 marks] Sulaimen calculated the yield to maturity, net of tax, on this bond purchase using Excels Goal Seek function. How did he do it? Provide instructions that a user of this spreadsheet could follow to check his findings.