Question 1 (Bonds)

Question 1 (Bond Valuation) [25 points] (a) [10 points] You own a US Treasury bond with 5 years till maturity. It pays a coupon of 8% on a semiannual basis (i.e. $4 each six months for a $100 bond). The current (annual percentage rate) interest rate is 7% (3.5% semiannually). What is the price of this bond today? ................
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