i$.$ Explain briefly how the key features of a typical bond facilitate lending and

borrowing in public markets.

ii$.$ Explain the method you would use to arrive at a price for the following

government bond: it has a coupon of $3\%$ payable annually, has a term to

maturity of $5$ years, and currently yields $5\mathrm{.}5\%.$

iii. What would happen to the bond$$s yield to maturity $($YTM$)$ in part $($ii$)$ above

$($a$)$ if the coupon were lower

$($b$)$ if the bond$$s price were lower?