Question 35?

34. Four years ago you bought a 25-year 8.5% $1,000 bond. The bond pays interest each 6 months. You want to sell the bond. You just received the 8th semiannual interest payment of $42.50 ($1,000 x 4.25% periodic rate = $42.50). Similar bonds are being issued that pay 6% semiannually. What is your bond worth today? 3 35. Refer to Problem 34. Why is your bond worth more than the $1,000 face value