Solving the following questions below for the attach cased study:

Questions:

1. Briefly discuss the key drivers of the growth in green bonds. (4 marks)
2. Recently, the green bond index has been well-established. The introduction of an index will deepen the investor base.  Do you agree? Justify your answer.
3. Bond quotes have become more available with the rise of the internet. We got the above information about the bond issued by Microsoft Corp from finra-markets.morningstar.com. Microsoft Corp has a coupon rate of 5.2% and matures on 06.01.2039. the last sale on this bond was at a price of $128.79. Briefly discuss why Microsoft Corp sold this bond at a premium.
4. Discuss the implications of an expected increase in yield to maturity on Microsoft Corp bond pricing. 
5. Taking the two scenarios in C and D above, calculate the interest rate risk and explain why companies like Microsoft Corp issue bonds with longer maturity. 
6. Briefly discuss the importance of credit and rating element information of Microsoft Corp above and the implication of lowering the company's bond rating?
7. State clearly any assumptions that you made in your calculation

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Q2: Bond Valuation and Bond markets Corporate bond financing has increased as a proportion of total global corporate financing substantially since 2013. In 2013, the volume of corporate bond issuance- including longer maturity bond (see Microsoft Corp bond below) - reached $3.2 trillion as compared to just $0.9 trillion in 2000. Green and climate bonds have also received increasing attention over the past few years as key instruments to finance the transition towards a low-carbon economy (Deschryver et al 2020). The green bond has grown from $0.8 billion in 2007 to $257.7 billion in 2019. MICROSOFT CORP Coupon Rate 5.200% Price/Yield Chart Price Chart 02/20/2017 -Price 2017 - Yield Chart Bankruptcy Insurance Mortgage Insurer Pre-Refunded/Escrowed Call Date Maturity Date 06/01/2039 02/17/2022 2018 Additional Description Credit and Rating Elements Moody's Rating Standard & Poor's Rating TRACE Grade Default Put Date 2019 Put & Redemption Provisions Call Price Put Price 2020 Symbol MSFT.GC Last Trade Price Zoom: 5D 1M 3M YTD 1Y 3Y SY 10Y Max $128.79 Trade History 2021 Price $ 140.00 Call Frequency 120.00 Aaa (12/07/2017) AAA (05/11/2009) Put Frequency 100.00 Investment Grade Senior Unsecured Note N CUSIP Last Trade Yield 3.044% 594918AD6 Bond Type Next Call Date Last Trade Date 02/17/2022 Prospectus Classification Elements Debt Type Industry Group Industry Sub Group Sub-Product Asset Sub-Product Asset Type State Use of Proceeds Security Code Special Characteristics Medium Term Note Issue Elements Offering Date Dated Date First Coupon Date Day Count Form Original Offering* Amount Outstanding* Series Issue Description Project Name Payment Frequency Depository/Registration Security Level Collateral Pledge Capital Purpose *dollar amount in thousands Bond Elements Original Maturity Size* Amount Outstanding Size* Yield at Offering Price at Offering Callable Coupon Type Escrow Type *dollar amount in thousands US Treasury Yield US Corporate Debentures Senior Unsecured Note Industrial Manufacturing CORP Corporate Bond N 05/11/2009 05/18/2009 12/01/2009 $750,000.00 $520,258.00 Semi-Annual 30/360 Book Entry DTC, Clearstream, Euroclear Senior 750,000.00 520,258.00 5.21% $99.79 Fixed Q2: Bond Valuation and Bond markets Corporate bond financing has increased as a proportion of total global corporate financing substantially since 2013. In 2013, the volume of corporate bond issuance- including longer maturity bond (see Microsoft Corp bond below) - reached $3.2 trillion as compared to just $0.9 trillion in 2000. Green and climate bonds have also received increasing attention over the past few years as key instruments to finance the transition towards a low-carbon economy (Deschryver et al 2020). The green bond has grown from $0.8 billion in 2007 to $257.7 billion in 2019. MICROSOFT CORP Coupon Rate 5.200% Price/Yield Chart Price Chart 02/20/2017 -Price 2017 - Yield Chart Bankruptcy Insurance Mortgage Insurer Pre-Refunded/Escrowed Call Date Maturity Date 06/01/2039 02/17/2022 2018 Additional Description Credit and Rating Elements Moody's Rating Standard & Poor's Rating TRACE Grade Default Put Date 2019 Put & Redemption Provisions Call Price Put Price 2020 Symbol MSFT.GC Last Trade Price Zoom: 5D 1M 3M YTD 1Y 3Y SY 10Y Max $128.79 Trade History 2021 Price $ 140.00 Call Frequency 120.00 Aaa (12/07/2017) AAA (05/11/2009) Put Frequency 100.00 Investment Grade Senior Unsecured Note N CUSIP Last Trade Yield 3.044% 594918AD6 Bond Type Next Call Date Last Trade Date 02/17/2022 Prospectus Classification Elements Debt Type Industry Group Industry Sub Group Sub-Product Asset Sub-Product Asset Type State Use of Proceeds Security Code Special Characteristics Medium Term Note Issue Elements Offering Date Dated Date First Coupon Date Day Count Form Original Offering* Amount Outstanding* Series Issue Description Project Name Payment Frequency Depository/Registration Security Level Collateral Pledge Capital Purpose *dollar amount in thousands Bond Elements Original Maturity Size* Amount Outstanding Size* Yield at Offering Price at Offering Callable Coupon Type Escrow Type *dollar amount in thousands US Treasury Yield US Corporate Debentures Senior Unsecured Note Industrial Manufacturing CORP Corporate Bond N 05/11/2009 05/18/2009 12/01/2009 $750,000.00 $520,258.00 Semi-Annual 30/360 Book Entry DTC, Clearstream, Euroclear Senior 750,000.00 520,258.00 5.21% $99.79 Fixed