You are the vice president of Oriental Asset Management and director of the company's pension fund management division. One of your clients, Coleman Technologies, seek your advice on investment of the company's pension fund. Interest rates are expected to be quite volatile for the next few years. It is now January 1, 2021 and Coleman Technologies is now reviewing strategy regarding the pension fund and also considering new investments in the bonds issued by the Hong Kong Airport Authority and the Agile Property, a listed company in the Stock Exchange of Hong Kong. The Hong Kong Airport authority issued a series of 4.0 percent coupon 30-year bonds in January 2007. The par value of each bond is $1,000. In January 2021, 14 years later after the issue, the price of the bonds had increased from $1,000 to $1,125.61. Assume the bond pay coupon annually. The Agile Property issued a series of 3.0 percent coupon 15-year bonds in January 2016. The par value of each bond is $1,000. The bond had a deferred call provision that permitted the company to call the bond 10 years after their issue date (i.e. the bond can be called in January 2026) at a price of $1,050. In January 2021, 5 years later after the issue, the price of the bond is $845.57. Assume the bond pay coupon annually. Required: a. What is price risk (interest rate risk)? What is reinvestment risk? How might these two risks affect the investment strategy on fixed rate long-term bonds? (6 marks) Each bond issued by the Hong Kong Airport Authority originally sold at par value. What was the yield to maturity of these bonds when they are issued? (2 marks) b. c. Calculate the yield to maturity of the bond issued by the Hong Kong Authority in January 2021. (3 marks) Calculate the yield to maturity of the bond issued by the Agile Property in January 2021. (3 marks) d. e. Calculate the yield to call of the bond issued by the Agile Property in January 2021. (3 marks) f. If you invest in the bond issued by the Agile Property, would you be more likely to earn the yield to maturity or the yield to call? Explain