Question 1 (a) (b) (C) If you are applying for a 1-year loan, Bank ABC quoted a 15.7% annual percentage rate (APR) that will be compounded monthly and Bank XYZ quoted a 16.0% APR that will be compounded semi-annually. Which bank would you choose to borrow from? Illustrate your reasons. (8 marks) A $1,000 face value bond makes a $50 coupon payment semi-annually. The bond matures in ve years with a yield-to-maturity (Y TM) of 9%. Round your answers to two (2) decimal points. F ill in values for Cells B 1:B7 in the table below. Show your formula for Cell B7. Without using any calculation, distinguish whether the bond is selling at premium, at discount, or at par. Justify your answer. A B Settlement date Maturity date 1 2 3 Annual coupon rate 4 Annual YTM 5 6 T Face value (% of par) Coupons per year Bond price (% of par) (11 marks) You wish to have $500,000 of buying power 10 years later. If the nominal return on your savings account is 5% and the ination rate is 2.9%, calculate the real rate of retum, round your answer to two (2) decimal points. Fill in the values for Cells B1 :B6 as shown in the table below. Show the Excel formula for Cell B3 and B6, respectively. A B Nominal Rate: Ination Rate: Real Rate: l | Target value: l | =| Years of savings: ChU'l-b-LUN| Per-year deposit amount (6 marks)