Q$3.$a$)$ Define call risk

and internet rate risk

b$)$In the wanable funds

theory explain how

default risk can explain

the interest rate

differential in debt

instruments.

c$)$ Calculate the yield

to maturity on a T$-$Bill

which matures in $91$

days with face value of

Rs $1000$ and a

purchase price of Rs

$950.$ Find the price of a

three year coupon

bond a face value of

$$1000$ when the

current bond rate is

$10\%$ p$.$a