Please use this information to handle Question 3 through 5. You are a financial manager at Amazon. Currently your firm is considering issuing bonds to raise capitals. Your credit rating is AAA. Thus you believe you are able to raise capitals at a relatively decent cost (interest payment). When you look at Yield Curve, yield to maturity (discount rate) with AAA credit rating bond is 5%. Face value is $1000.

3. What is your expected price of a bond if you consider issuing a bond with a 4% annual coupon rate (annual payment) and 5 years (maturity)? Here face (par) value is $1000.

4. Calculate current yield of this bond.

5. If we assume the bonds rating reduces to Bbb and the bond is priced at $960, what is Yield to Maturity of the bond with 4% annual coupon rate and 5 years maturity?