Zack has been considering investing in the bonds of PC Berhad. The bonds were issued 5 years ago at their RM100 par value and have exactly 10 years remaining until they mature. They have an 5% coupon interest rate, are convertible into 50 shares of common stock and can be called any time at RM1,08. The bond is rated AA by the rating agency. PC Berhad, a manufacturer of sporting goods, recenty acquired a small athletic-wear company that was in financial distress. As a result of the acquisition, the rating agency is considering a rating change for PC bonds. Recent economic data suggest that expected inflation, currently at 3% annually, is likely to increase to a 4% annual rate. Zack remains interested in the PC bond but is concerned about inflation, a potential rating change, and maturity risk. To get feel for the potential impact of these factors on the bond value, he decided to apply the valuation techniques he learned in his finance course. a)If Zack buys the bond today at its RM100 par value and holds it for exactly 3 years, at which tie the required return is 7%, how much of a gain or loss will he experience in the value of the bond (ignoring interest already received and assuming annual interest)? b. Rework part (a), assuming that Zack holds the bond for 10 years and sells it when the required return is 7%. Compare your finding to that in part (f), and comment on bonds maturity risk.