2. Suppose the effective semiannual interest rate is 3%.

TABLE 5 Table for problems.
Quarter 1 2 3 4 5 6 7 8 Oil forward price ($) 21.0 21.1 20.8 20.5 20.2 20.0 19.9 19.8 Zero-coupon bond price ($)
0.9852 0.9701 0.9546 0.9388 0.9231 0.9075 0.8919 0.8763

a. What is the price of a bond that pays one unit of the S&P index in 3 years?

b. What semiannual dollar coupon is required if the bond is to sell at par?

c. What semiannual payment of fractional units of the S&P index is required if the bond is to sell at par?