A. On December 14, 2020, you are considering one of the newly issued 30-year, semi-annual coupon bonds shown in the following exhibit. Issuer Bombardier Inc. Hydro One Coupon 6.50% 5.49% Price 101 125 Callable Currently callable Non-callable Call Price 110 NA a) Suppose that market interest rates decline by 100 basis points. Which bond should you consider? Explain. (6 marks) b) What would be the effect, if any, of an increase in the volatility of interest rates on the prices of each bond? (4 marks) A. On December 14, 2020, you are considering one of the newly issued 30-year, semi-annual coupon bonds shown in the following exhibit. Issuer Bombardier Inc. Hydro One Coupon 6.50% 5.49% Price 101 125 Callable Currently callable Non-callable Call Price 110 NA a) Suppose that market interest rates decline by 100 basis points. Which bond should you consider? Explain. (6 marks) b) What would be the effect, if any, of an increase in the volatility of interest rates on the prices of each bond? (4 marks)