4. Answer the following questions: [M12]: Answer the current yield on a three-year bond whose face value is $1,000 with a coupon rate of 6% per year and a price of $900? Your answer should be in...

Please provide explanation for D1

Extracted text: 4. Answer the following questions: [M12]: Answer the current yield on a three-year bond whose face value is $1,000 with a coupon rate of 6% per year and a price of $900? Your answer should be in percentages and rounded to two decimal places, and don't put the symbol of %. Eg. If your answer is 34.45678%, fill in 34.47. [M13]: Answer the (theoretical) bond price whose maturity is three years with interest rate of 10% per year and face value is $1,000 with a coupon rate of 6% per year. Your answer should be rounded to natural number, and don't put the symbol of $. Eg. If your answer is $34.567, fill in 35. [D1]: Explain the effects of diversification in portfolios in several lines.