Under LCM, the lower of cost or market is used. In this case, cost ($80) is lower than market
($82).

The book value of the debt would not be impacted by what is prevailing in the markets. Thus, even as the market value of a firm's bond fluctuate by the hour, it will have no impact on the debt's book value.

%*P = D *r = -4.9 * 0.0035 = -1.72%.

Counter example for the two untrue statements: return of -90%, +50%, +50% gives a total return of -77.5%

Restricted foreign supply implies that the supply of the good will fall. Domestic supply will rise but not to the level high enough to maintain the same level of supply in the market. Domestic producers enjoy a higher price as a result of the restricted supply. The higher price in the market implies that domestic consumption will fall.