In 2020, country G sold a zero coupon bond with a maturity of 5 years and a face value of €100

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In 2020, country G sold a zero coupon bond with a maturity of 5 years and a face value of €100. The country is rated AAA, hence the opportunity cost of capital is 7%. For a B rating, the risk adjusted discount rate is 12%, and for junk bonds, it will be 20%. a) Calculate the price of the bond in 2020. b) In 2022 the country is down rated to B, which may reflect a probability of default during the next 3 years of about 20%. What would be the value in 2022? c) What will be the price of a bond with the same characteristics sold in 2020? d) Calculate b) and c) for a probability of default of 50% (junk bond). e) Identify and discuss all components of the “risk premium required by the financial market.”