You want to buy, on July 1, 2007, an ADS bond which offers a coupon rate of 12% (coupon payments are made semi-annually) and which matures on July 1, 2027. Knowing that the rate of return demanded by the market on this bond is 10% compounded semi-annually. 1. What price are you willing to pay for this bond as of July 1, 2007. You buy this bond on July 1, 2007 and you decide to sell it in 5 years. The rate of return demanded by the market at the time of resale increases to 12%. 2. At what price should you resell the ADS bond? 3. Calculate the effective rate of return you will realize.