6. A 5-year bond with semiannual coupons is redeemable at its par value of 1000. The amount for amortization of premium in the 6th coupon payment is 2.08 and the amount for amortization of premium in the 7th coupon payment is 2.158. Determine the coupon rate (as an annual nominal rate compounded semiannually). (a) 0.25% (b) 0.50% (c) 4.00% (d) 6.00% (e) 8.00%

7. Harvey buys a perpetuity on January 1, 2021. The perpetuity has annual payments beginning January 1, 2022. The first two payments are 100 each, the next two payments are 100(1.03) each, the next two payments are 100(1.03)2 each, ..., increasing forever by a factor of 1.03 every two years. Calculate the price of this perpetuity at an annual effective interest rate of 4%.

   (a) 4080 (b) 3953 (c) 3876 (d) 3801 (e) 1938