Question: #Precisy the formulas you will use (DO NOT USE EXCEL) Problem 2 (5 points) The Sunny Inc. bond is currently trading at $1020. This obligation

#Precisy the formulas you will use (DO NOT USE EXCEL)

Problem 2 (5 points) The Sunny Inc. bond is currently trading at $1020. This obligation of which the term is 4 years and has a face value of $1000. It offers a coupon rate annual of 5.25% paid semi-annually. The risk-free rate is 0.5%. has. Determine the rate of return on the bond (2 points) b. Determine the risk premium demanded by investors. (2 points) vs. Determine if the Sunny Inc. bond is at a discount or a premium. (1 mark)

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