Problem $2,$ Question $2$

Interest rates are equal to $8\%$ for every maturity. A $3-$year bond with face value $$600$ offers an annual coupon rate of $6\%.$ A $2-$year bond with an annual coupon $$60$ sells at par.

What is the price of the $2-$year bond?

a$.$ $$500$

b$.$ $$600$

c$.$ $$750$

d$.$ $$1000$

e$.$ We cannot tell without knowing the face value

f$.$ $$1500$

g$.$ $$1200$

h$.$ $$800$