Question 3: (Bond Valuation) 20 marks (a). Toronto Inc has 6 percent annual-pay coupon bonds that trade with a yield to maturity of 5.5 percent. The bonds have eight years to maturity. What is the current bond price? (2.5 marks) (b). A ten-year annual pay bond with a 5% coupon rate is trading with a market yield of 7.75 percent. What is the percentage change in price if the market yield decreases by 75 basis points? (5 marks) (c). Eight years ago Josh purchased a 7.5% coupon bond for $1075. Today, he sold the bond for $1350. During the investment period, Josh reinvested all coupons at 4%. What is his rate of return on the bond? (5.5 marks) (d). De Lager Inc. has semi-annual pay bonds that trade with a yield to maturity of 7 percent. The bonds have a six-year term to maturity and are currently selling for $1,067.20. What is the bond's coupon rate and the current yield? (7 marks)