3. You are interested in purchasing Credit Default Swaps on a 100,000,000 Euro position in 5 year bonds issued by the government in Greece. Using the rates quoted at the CNBC bond page, answer the following: (a) If you purchase Credit Default Swaps on 100,000,000 Euros in 5-year Greek government debt, describe the payments required under the credit default swap contract (assuming the payments are quarterly in arrears) (b) If there is a default event after 3 years and debt is worth 40% of its face value, how much will the credit default swap pay (assume it is cash settled)? Show your calculation (c) If you own 100,000,000 in 5 year bonds issued by the Greek government, are you perfectly hedged by the Credit Default Swap contract? Explair. 3. You are interested in purchasing Credit Default Swaps on a 100,000,000 Euro position in 5 year bonds issued by the government in Greece. Using the rates quoted at the CNBC bond page, answer the following: (a) If you purchase Credit Default Swaps on 100,000,000 Euros in 5-year Greek government debt, describe the payments required under the credit default swap contract (assuming the payments are quarterly in arrears) (b) If there is a default event after 3 years and debt is worth 40% of its face value, how much will the credit default swap pay (assume it is cash settled)? Show your calculation (c) If you own 100,000,000 in 5 year bonds issued by the Greek government, are you perfectly hedged by the Credit Default Swap contract? Explair