Grand Ltd has issued a 3 year bond with a face value of $1000 and which pays a coupon of 6.10% p.a.. Coupon payments are made semi annually. assume a yield to maturity of 5.80% p.a.

a) Calculate the value of the bond.

b) Calculate the effective annual yield (EAY) of the bond.

c) suppose you bought 100 bonds at the price you indicated in a) above. After one year, immediately after the 2nd coupon payment, you sell the bonds at a yield of 6.1% p.a. 1- Calculate the price (per bond) you obtained from the sale.

2- At the time sold your bonds, was the bond a premium bond, a scout bond or a bond that trades at par? Explain why, with reference coupon rate.