Note: all the coupons are annual. In order to get the semi-annual coupons, you need to use half of the coupon rate.

Question 2: An Exxon Mobil Corp. zero coupon bond matures in 6 years. If the bond is priced to yield 2.213% annualized [Zero-coupon bonds don't pay any coupons, as the name clearly suggests] what is the bond's current price? Question 4: Johnson and Johnson (JNJ), rated AAA by S&P, issues an 8-year $1000 par value bond that pays semi-annual coupons. Annual coupon rate is 3.2%. The bond is priced at $1096.59 At the same time Valero Corporation (rated BBB by S&P) issues a similar bond with same maturity, par value, and coupon rate and frequency. The BBB-AAA spread is 90 basis points. Find the bond price of Valero Corporation. Hint: First find the semi-annual yield of the JNJ bond. Then annualize the yield. Using the spread, find out the annualized yield of Valero bond. From which you can calculate the semi-annual yield of the Valero bond. Now, find the price of the Valero bond.]