with calculations by hand please

2. a) Calculate i, the annual effective rate of interest (to five significant figures), for the following nominal rates of interest: i) (4) = 5.50% per annum. [1 mark] ii) (12) = 5.50% per annum. [1 mark] iii) (1/2) = 5.50% per annum. [1 mark] iv) Explain why i(12) gives a higher annual effective interest rate than i(4). [1 mark] b) A fixed interest bond pays quarterly coupons in arrears of 5% per annum. The bond is redeemed at par. Sally buys 100 nominal of this bond. It has three years until redemption and the next coupon is in exactly three months' time. i) Draw a timeline that shows the cashflows that Sally expects to receive from this bond. [2 marks] ii) Calculate the price of the bond using an effective interest rate of 4% per annum. [3 marks] iii) Calculate the coupon rate if the current price of the bond is 100 (i.e. par) per 100 nominal. You should assume that the coupon pays quarterly in arrear and that the effective rate of interest is 4% per annum. [1 mark] [Total: 10 marks] 2. a) Calculate i, the annual effective rate of interest (to five significant figures), for the following nominal rates of interest: i) (4) = 5.50% per annum. [1 mark] ii) (12) = 5.50% per annum. [1 mark] iii) (1/2) = 5.50% per annum. [1 mark] iv) Explain why i(12) gives a higher annual effective interest rate than i(4). [1 mark] b) A fixed interest bond pays quarterly coupons in arrears of 5% per annum. The bond is redeemed at par. Sally buys 100 nominal of this bond. It has three years until redemption and the next coupon is in exactly three months' time. i) Draw a timeline that shows the cashflows that Sally expects to receive from this bond. [2 marks] ii) Calculate the price of the bond using an effective interest rate of 4% per annum. [3 marks] iii) Calculate the coupon rate if the current price of the bond is 100 (i.e. par) per 100 nominal. You should assume that the coupon pays quarterly in arrear and that the effective rate of interest is 4% per annum. [1 mark] [Total: 10 marks]