1.In today's respective markets for 1-month, 3-month, and 6-month coupon payments, trading determines market price of $99.5 per $100 of coupon payment receivable in 1 month, $98.25 per $100 of coupon payment receivable in 3 months, and $97.25 per $100 of coupon payment receivable in 6 months. A mortgage lender has originated a 20 year interest-only mortgage with balance of $500,000. The announced annual mortgage coupon rate is 6%. He offers to sell you, today, a security composed of a single 3-month coupon plus a single 6-month coupon. Each of which could be alternately traded on an individual basis in these markets.

a) what would you offer to pay for this security if you used the announced annual coupon rate of 6% to calculate its present discounted value?