Find the Present Value and then do the calculation for Time 0. The coupon $12 must be used as Bond 2 and a Coupon $0 must be used as a Bond 1. The Market Price will be $98. Thank you for the help!

Maturity 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 Coupon 0.00 0.00 8.00 12.00 9.00 8.00 9.00 10.00 11.00 12.00 Market Price Present Value 94.90 90.00 96.00 101.60 95.00 91.00 92.00 93.00 95.00 96.00 0.10469 0.10536 0.10681 0.50 1.00 1.50 100.00 0.00 100.00 4.00 4.00 104.00 6.00 6.00 6.00 4.50 4.50 4.50 4.00 4.00 4.00 4.50 4.50 4.50 5.00 5.00 5.00 5.50 5.50 5.50 6.00 6.00 6.00 1.00 8.00 98.00 97.396 4.00 104.00 Bonds Bond 1 Bond 2 0.5 -94.9 -00 100 ?x2 100 -104 X2 Test Bond Sell 1 Unit 98 X1 0.04 Market Price Present Value Value at Time 0 98 1.04 Maturity 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 Coupon 0.00 0.00 8.00 12.00 9.00 8.00 9.00 10.00 11.00 12.00 Market Price Present Value 94.90 90.00 96.00 101.60 95.00 91.00 92.00 93.00 95.00 96.00 0.10469 0.10536 0.10681 0.50 1.00 1.50 100.00 0.00 100.00 4.00 4.00 104.00 6.00 6.00 6.00 4.50 4.50 4.50 4.00 4.00 4.00 4.50 4.50 4.50 5.00 5.00 5.00 5.50 5.50 5.50 6.00 6.00 6.00 1.00 8.00 98.00 97.396 4.00 104.00 Bonds Bond 1 Bond 2 0.5 -94.9 -00 100 ?x2 100 -104 X2 Test Bond Sell 1 Unit 98 X1 0.04 Market Price Present Value Value at Time 0 98 1.04