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Consider a 10-year principal strips with par $250,0 00. Assuming semiannual compounding, what is the price of this principal st rips if the YTM is

Consider a 10-year principal strips with par $250,0

00. Assuming semiannual

compounding, what is the price of this principal st

rips if the YTM is 5.25%? If the

marginal tax rate is 35%, what is the total present

value of the tax payments at discount

rate 5.25%? (Note: Although assuming semiannual com

pounding, the tax payments are

calculated every year.)

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