Homework Answers
Coupon = (9% of 1000) / 2 = 45
Rate = 12% / 2= 6%
Number of periods = 4 * 2 = 8
Price = Coupon * [1 - 1 / (1 + r)n] / r + FV / (1 + r)n
Price = 45 * [1 - 1 / (1 + 0.06)8] / 0.06 + 1000 / (1 + 0.06)8
Price = 45 * [1 - 0.627412] / 0.06 + 627.412371
Price = 45 * 6.2098 + 627.412371
Price = $906.85
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