Problem 1 (Required, 25 marks) You are given two 5-year callable bond (Bond A and Bond B) .Bond A: It has face value $600 and pays coupon semi-annually at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed on any coupon payment date (including maturity date) at price $660. Bond B: It has face value $650 and pays coupon quarterly at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed on any coupon payment date (including maturity date). The redemption price is $700 during 4th year and $620 during 5th year. . You are also given that The minimum yield rate earned by Bond A is annual nominal yield rate 6.8% convertible semi-annually. . The current price of Bond B is 705.8267 (a) What is the price of bond A? (b) An investor would like to buy the bond (among these two bonds) with higher "minimum yield rate". Which bond should he choose? Explain your