The purpose of this assignment is to explain core concepts related to fixed income securities.Read t

The purpose of this assignment is to explain core concepts related to fixed income securities.Read the Chapter 5 Mini Case on page 230 in Financial Management: Theory and Practice. Using complete sentences and academic vocabulary, please answer questions a through f.M I N I C A S ESam Strother and Shawna Tibbs are vice presidents of Mutual of Seattle InsuranceCompany and co-directors of the company’s pension fund management division. Animportant new client, the North-Western Municipal Alliance, has requested that Mutualof Seattle present an investment seminar to the mayors of the represented cities, andStrother and Tibbs, who will make the actual presentation, have asked you to help themby answering the following questions.a. What are the key features of a bond?b. What are call provisions and sinking fund provisions? Do these provisions makebonds more or less risky?c. How does one determine the value of any asset whose value is based on expectedfuture cash flows?d. How is the value of a bond determined? What is the value of a 10-year, $1,000 parvalue bond with a 10% annual coupon if its required rate of return is 10%?e. (1) What would be the value of the bond described in part d if, just after it had beenissued, the expected inflation rate rose by 3 percentage points, causing investorsto require a 13% return? Would we now have a discount or a premium bond?(2) What would happen to the bond’s value if inflation fell and rd declined to 7%?Would we now have a premium or a discount bond?(3) What would happen to the value of the 10-year bond over time if the requiredrate of return remained at 13%? If it remained at 7%? (Hint: With a financialcalculator, enter PMT, I/YR, FV, and N, and then change N to see what happensto the PV as the bond approaches maturity.)f. (1) What is the yield to maturity on a 10-year, 9% annual coupon, $1,000 par valuebond that sells for $887.00? That sells for $1,134.20? What does the fact that abond sells at a discount or at a premium tell you about the relationship betweenrd and the bond’s coupon rate?