.

Bond B, problem 2

You are examining three bonds with a par value of $1,000 (you receive $1,000 atmaturity) and are concerned with what would happen to their market value if interest rates(or the market discountrate) changed.

Bond Ba bond with 7years left to maturity that has an annual coupon interest rate of 10 percent, but the interest is paid semiannually.

If the market discount rate were 10percent per year compoundedsemiannually, the value of Bond B is $________(Round to the nearestcent.)