Question: Interest rates are equal to 6% for every maturity. A 3-year bond with face value $800 offers an annual coupon rate of 8%. A 2-year

Interest rates are equal to 6% for every maturity. A 3-year bond with face value $800 offers an annual coupon rate of 8%. A 2-year bond with an annual coupon $60 sells at par.

What is the price of the 3-year coupon bond?

a. $789

b. $1010.7

c. $725.4

d. $842.8

e. $1053.5

f. $885.5

g. $800

h. $935.8

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