Attempts Do No Harm /3 3. Treasury bills, notes, and bonds Suppose you purchase a government bond that is due in three years, with a face value of $100 and an annual coupon rate of 6.5%. Coupons are paid at the end of each year. The annual coupon payment is S If the current yield is 5.0%, then the price paid for the bond is Suppose interest rates increase. The price of your existing government bond will