Question 9 An insurance company owns a 1,000 par value 10 percent bond with semi-annual coupons. The bond will mature for 1,000 at the end of 10 years. The company decides that an 8-year bond would be preferable. Current yield rates are 7 percent compounded semi-annually. The company uses the proceeds from the sale for the 10 percent bond to purchase a 6 percent bond with semi-annual coupons, maturing at par at the end of 8 years. Calculate the par value of the 8-year bond. 1.000 B 1.291 1,306 1.419