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3A. You have a $1000 par 5% coupon (nominal rate) US Treasury bond with 7 years remaining in its life. Coupons are paid semiannually and

3A. You have a $1000 par 5% coupon (nominal rate) US Treasury bond with 7 years remaining in its life. Coupons are paid semiannually and the next coupon payment is exactly six months away. The market interest rate is 6% (nominal rate with semiannual compounding). What is the current price of this bond?

3B. What is the effective annual rate that corresponds to a nominal interest rate of 6% with semi-annual compounding?

3C. Price a zero coupon bond with a face amount of $1000 maturing in 7 years. Assume that the nominal interest rate is 6% and interest is compounded semiannually.

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