Question: (16 Points) Metropolis has been planning to develop a new warning system to make Superman aware of significant dangers. The installation of the system costs

 (16 Points) Metropolis has been planning to develop a new warning

(16 Points) Metropolis has been planning to develop a new warning system to make Superman aware of significant dangers. The installation of the system costs more than what their budget allows so the mayor decides to issue a 30-year bond to finance the project. Each bond has a face value of $1,000 and it promises a coupon rate of 5.2%, which will be paid semi-annually. 4. a. (6 Points) Calculate the price of this bond if the Yield to Maturity (YTM) is 6.0%. (10 Points) Let's assume you bought this bond on the date of issue. Right after receiving the fourth coupon payment (i.e., Two years later), you decided to sell the bond. Exactly on that date, the YTM decreased to 5.8%. Under these circumstances, what is your holding period return? (Note: You do not need to calculate the annualized return, please calculate the two-year return for this investment) b

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