An institutional investor, Gilbert Limited, is planning to purchase a straight Eurobond in order to include it in the investment portfolio. Gilbert receives following information:

Current Eurobonds in the Euromarkets are trading at a yield of 10.50% annually

An existing Eurobond with a face value of USD 2 million pays annual fixed 8.50% coupons

The bond Gilbert is considering will mature on 31 December 2022.

ii. Why is the price at 15 June 2019 different from the price Gilbert should have been paid if it purchased the bond at 01 January 2019? [1 mark]