6. In practice, bonds issued in the US usually make coupon payments twice a year. So, if an ordinary bond has a coupon rate of 14%, then the owner will get a total of $140 per year, but this $140 will come in two payments of $70 each. Suppose we are examining such a bond with face value of $1,000. The yield to maturity is quoted at 16%. And the bond matures in 7 years. What is the bond's price?

7.Suppose you're looking at two bonds identical in every way except for their coupons and, of course, their price. Both have 12 years to maturity and a par value of $1,000. The first bond has a 10% annual coupon rate and sell for $935.08. The second has a 12% annual coupon rate. What do you think it would sell for?