ABC firm recently issued a corporate bond with a face value of S10,000. The bond pays monthly coupons at a rate of 5.25% p.a. and has 12 years remaining till maturity. Market yields are currently 6% p.a. The bond is currently selling at the price of $8,500.

a. Determine the fair value of these bonds to you and discuss if you would invest in corporate bonds issued by ABC.

b. A bond with a $1,000 par value makes semi-annual payments with a coupon rate of 12%. If 55 days have passed since the last coupon payment, what is the accrued interest?