Question 2: The current term structure is shown here: The Term Structure of Interest Rate 7 Inka 4 5 Tin torty Cy) a) (7 marks) Calculate the current price of a government bond with a face value of $1000 and a coupon rate of 7%. It is an annual coupon bond that matures in 3 years b) (13 marks) Calculate the current price of a bond issued by XYZ corporation if it has a face value of $1000 and a coupon rate of 7%. It matures in 3 years. Use the following table to find the default risk premium (Assume the default risk is not a function of maturity) Required rate of interest Band Rating AA XYZ Co. 7% 3 years from now ABC Co. 8% 3 years from now NP Co. B 8.59 AA AA Syears from now XTC. 394 5 years from now Cu 19% 3 years from som MacBook Air