Answer:
10.1
Given
Year to maturity = 6 years
Number of period n=6*2=12
Face value P=$1000
Coupon rate =8%
Coupon =8%*1000=$80
Semi annual coupon C=80/2=$40
rate of return =12% annual
Semi annual rate of return r =12%/2=6%
So Price of Bond =C*(1-(1+r)^-n)/r + P/(1+r)^n
Price of bond= 40*(1-(1+6%)^-12)/6%+1000/(1+6%)^12
Price of Bond =$ 832.32
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