Emma buys a bond with a face value of $100, a time to maturity of 5 years, a coupon of 2% pa with semi-annual payments and a yield of 2.4% pa. Three year's later (immediately after the sixth coupon has been paid), the Reserve Bank of Australia unexpectedly decreases the cash rate. The yield on Julie's bond decreases to 1.2% pa and she decides to sell.

Required

Calculate the buying and selling prices. Discuss why the price has changed.

(In dollars and cents accurate to the nearest cent)

Please show all the working step by step