Your sibling is having their first child. You want to get a really good gift and so you decide to buy the new baby a Deep Discount Bond. The deep discount bond has a face value of $1,000 and a nominal interest rate of 8% compounded semiannually, with a life of 15 years.

A) What is the purchase price for this Strip described above?

B) Instead of buying a new Deep Discount Bond another option would be to buy an existing deep discount bond. Assume the existing deep discount bond is on sale for $348.00, with a remaining life of 16 years. What is the Yield t0o Maturity of this bond?

C) Should you hold deep discount bonds in a taxable account? Why or why not?