Question 3 AN 8% corporate bond is due in 10 years. Required: a) Calculate the price of the bond if the nominal yield to maturity is 12% p.a. using the factor formula (Note that the bond pays the...

Question 3
AN 8% corporate bond is due in 10 years.
Required:
a) Calculate the price of the bond if the nominal yield to maturity is 12% p.a. using the factor formula (Note that the bond pays the coupons semiannually and has a face value equal to $5,000).
b) Explain what is meant by the term ‘bond ratings’ and give examples from real life.