Question: b) A 10-year zero coupon bond with a face value of $1,000 was issued on 1 April 2017. Assume comparable bonds normally pay semi-annual coupons.

b) A 10-year zero coupon bond with a face value of $1,000 was issued on 1 April 2017. Assume comparable bonds normally pay semi-annual coupons. Ben purchased the bond on 1 April 2021 at a price that would give him a yield to maturity of 6% p.a. compounded half yearly. Calculate the price Ben paid for the bond. Round your answer to the nearest cent. (2 marks)

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