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65. Find the value today of a 2-year dual currency bond with annual coupons (paid in U.S. dollars at a 5 percent coupon rate) that

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65. Find the value today of a 2-year dual currency bond with annual coupons (paid in U.S. dollars at a 5 percent coupon rate) that pays $500 per $1,000 par value at maturity. The cash flows of the bond are: Year 0 Year 1 Year 2 $0 $50.00 $50 + $500 The dollar-based yield to maturity is is = 3%; the spot exchange rate is $1.80 = $1.00; expected inflation over the next three years is /; = 2% in the U.S. and / = 3% in the U.K. A. $927.62 B. 5941.30 C. $965.06 D. $599.00

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