Homework Answers
Coupon = Face value * coupon rate
= $400,000 * 6%/2
= $12,000.
Price=12,000/(1+0.055+0.008*0.5)^0.5 + 12000/(1+0.055+0.008*1)^1 + 12000/(1+0.055+0.008*1.5)^1.5 + (400,000+12000)/(1+0.055+0.008*2)^2=$306,241.63
= 11,660.9321 + 11,288.8053 + 10,887.6617 + 359,185.0684
= $393,022.47
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