An investment bank purchased a Treasury bond at a government bond auction today. This bond has exactly 10 years to maturity and will pay annual coupons of 1% per annum. All: bonds in this issue (i.e. Treasury bonds with a coupon rate of 1% per annum paid yearly with 10 years to maturity) are trading in the bond market now at their face value of $1,000,000. Rather than just buy-and-hold this bond, the investment bank decides to strip the coupon payments off this newly issued 10 year to maturity bond to create a zero coupon bond and a separate 10 year. income only annuity rights to payments from the zero coupon bond and the separate annuity stream will be sold to investors. 

A). If the zero-coupon bond can be sold at a yield of 0.8% per annum (paid yearly), what is its principle payment worth today?

B). What is the value today of the income stream (annuity of coupons) if sold at the yield of 0.8% per annum (paid yearly)?

C). What is the dollar (and percent) gain made by the investment bank? Briefly comment on this transaction from the investment bank's perspective. rn