5. Semi-annual coupon bond. Suppose there is an 8% coupon, 5-yr. bond that pays interest semi-annually. The spot rate is 10% and is the same for all coupons and the face value. Let the Face Value of Bond = $1000

(a) What is the annual coupon payment? What is each coupon payment C?

(b) Since the spot rate is 10%, the semi-annual spot rate is then y = 5%, and there are T = 10 half-year periods. What is the fair value of this bond?