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4) Each of the following bonds has 5 years to maturity and a face value of 100. Bond Price 12% coupon bond A 6% coupon

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4) Each of the following bonds has 5 years to maturity and a face value of 100. Bond Price 12% coupon bond A 6% coupon bond B Zero coupon bond Price a five-year bond with a face value of 100 and a coupon of 8% using: a) the 12% coupon bond and the zero coupon bond b) the 6% coupon bond and the zero coupon bond. c) hence, algebraically show that 0.5A + 0.5C = B

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