- Assuming that interest rates remain constant, the T-notes price is expected to (increase / decrease) -The T-note is described at selling at a (discount / premium) -When valuing a semiannual coupon bond, the time period variable (N) used to calculate the price of a bond reflects the number of (12/9/6/3) month periods remaining in the bonds life.

7. Valuing semiannual coupon bonds Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly. Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with three years to maturity has a coupon rate of 3%. The yield to maturity (YTM) of the bond is 7.70%. Using this information and ignoring the other costs involved, the value of the Treasury note is $ Based on your calculations and understanding of semi coupon bonds, complete the following statements