You are an internal auditor in a fund management company.

You have been asked to verify the valuation of three bonds picked from a funds portfolio as of close of business on 31 December 2015.

Bond A

Face value: $2,000,000

Coupon: 2.25% p.a. payable semiannually

Repayment: Bullet at maturity

Maturity: 5 years

Yield:

The yield required by investors for a 5-year bond rated A+ by Standard & Poors and A1 by Moodys is 2.5%

Bond B

Face value: $1,000,000

Coupon: Zero

Maturity: 10 years

Yield:

The yield required by investors for a 10-year bond rated AA- by Standard & Poors and Aa3 by Moodys is 3%

Bond C

Face value: $500,000,000

Coupon: 3% p.a. payable quarterly

Repayment: 16 quarterly payments

Final maturity: Matures in 4 years

Yield:

The yield required by investors for a 2-year average life bond rated BB by Standard & Poors and Ba2 by Moodys is 2.75%

What is the present value of Bond A

What is the present value of Bond B

What is the present value of Bond C