Reliant Energy has many bonds trading on the New York Stock Exchange. Suppose Reliant's bonds have identical

Question:

Reliant Energy has many bonds trading on the New York Stock Exchange.

Suppose Reliant's bonds have identical coupon rates of 8.5% but that one issue matures in 3 years, one in 9 years, and the third in 12 years. If the yield to maturity for all three bonds is 8%, what is the fair price of each bond? Please show calculations.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...