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Suppose the yields to maturity of 6-month, 12-month, 18-month and 24-month zero-coupon bonds are, respectively, 10%, 8%, 7%, and 6% per annum convertible semiannually. a.)

Suppose the yields to maturity of 6-month, 12-month, 18-month and 24-month zero-coupon bonds are, respectively, 10%, 8%, 7%, and 6% per annum convertible semiannually.

a.) What is the 2-year par yield?

b.) Find the price of a 2-year semiannual coupon bond with coupon rate of interest of 3.0407% per annum and face value 100.

c.) Comment of the result in b.

PLEASE SHOW ALL WORK BY HAND, WITHOUT USING A FINANCE CALCULATOR OR EXCEL. THANK YOU.

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