Question: Q2. Consider a semi-annual coupon bond having a face value (principal) of $1,000 and pays a coupon of 8% per annum. The current price

Q2. Consider a semi-annual coupon bond having a face value (principal) of

Q2. Consider a semi-annual coupon bond having a face value (principal) of $1,000 and pays a coupon of 8% per annum. The current price for the bond is $983. What is the 18 month forward price for this bond assuming that the interest rates for all maturities of 18 months or less is 10%? (15 marks)

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