Question: 4 . - A Corporate Bond ( ' 0 0 0 ) is quoted at 9 4 . 8 2 and offers an annual coupon

4.- A Corporate Bond ('000) is quoted at 94.82 and offers an annual coupon rate of 5.805%, the maturity date is in 5 years and The Federal Reserve is expecting an average inflation rate of 3% during the next vedr. Questions: A.- According with current price of this corporate bond. please confirm the asked quotation as at: (Mark with an X)(5 points) At Par At Premium At Discount B.-Assuming todays date, and according with the quoted price, calculate the present value of the annual interest and face value flows, with the discount rate expected as inflation rate by the Federal Reserve and compare with the quoted price, and give your recommendation: Security Value (10 Points) Recommendation: (5 Points) Buy Not Buy Why: Explain your recommendation:

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