Question: A managed fund is to restructure its balance sheet through the sale of $7 million of Treasury bonds that mature on 30 September 2022. The

A managed fund is to restructure its balance sheet through the sale of $7 million of Treasury bonds that mature on 30 September 2022. The bonds pay a fixed half-yearly coupon of 5.50 per cent per annum. The settlement date for the sale is 17 February 2018. Calculate the price at which the bonds will be sold. Current yields on similar bond issues are 8.50 per cent per annum.

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