You are required to show your work. Providing answers alone will not get you full credit. Please round all answers and intermediate results to 2 decimal places, unless further specified. Question 1 (13 marks) You are given the following table that shows the characteristics on different types of bonds: Coupon rate (%) Bond A Inflation rate + Bond B 2% 2.5% (annual Bond C 0% Bond D 5% (semi- annual payment) payment) Issuer Horus Bank Red Sea Ltd. US Government US Government Current 100% 96% 98% ?? market price Tenor 5 years 3 years 6 months 15 years Special feature N/A Bond holders get the right to convert the bond N/A N/A into shares of Red Sea Ltd. at maturity. (a) According to the characteristics of bonds A to D, explain and name the bonds A to D. (8 marks) (b) Suppose the yield to maturity of bond D is 3.5% and face value equals to $1,000, calculate the current market price of bond D. Please round the answer and intermediate results to 4 decimal places (5 marks)