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3. (4 points) Suppose Polar Telecom issues a semi-annual coupon bond with a 12 year maturity, face value of $1000 and coupon rate of 6%.

3. (4 points) Suppose Polar Telecom issues a semi-annual coupon bond with a 12 year maturity, face value of $1000 and coupon rate of 6%. a. (2 pts) Suppose the yield to maturity on the bond is 8%. Write down how you would price this bond using the present value formula. Make sure to include the relevant values for payment, i and N in the formula. b. (2 pts) Price the bond assuming yield to maturity of 8%

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