1. You as a bond trader finds a 3 year 8% corporate bond that is trading at 106 of 100 par value. The probability of Default and POD for each date of the bond is 2% along with a recovery rate of 30%. The government yield curve is at 2.15%. Is this corporate over or under valued? If you buy the bond at 106 what are the rates of returns that are expected. Set up a table and briefly discuss.