Question) A government bond with a face value of $500,000 was issued eight years ago and there are seven years remaining until maturity. The bond pays semi-annual coupon payments of $22,500, the coupon rate is 9% p.a. paid twice yearly and rates in the marketplace are 9.6% pa compounded semi-annually. What is the value of the bond today?

a. $484,960.34 b. $374,203.30 c. $490,226.31 d. $483,509.43 e. $500,000.00