You are considering the purchase of a 3 year Treasury bond with a face value of $1000 and zero-coupons. The market interest rate on similar risk and maturity bonds is 5%, compounded semi-annually. What is the highest price that are you willing to pay for the bond? Note: .-Zero-Coupon Bonds make no interest payments (Coupon=0) F (1+r)' Bond Value= (1+r)' F A zero coupon bond with a face value of $1,000 is issued with an initial price of $415.50. The bond matures in 10 years. What is the implicit interest, in dollars, for the first year of the bond's life? Use semiannual compounding. HULLAY