Using the information below, compute the prices of the following semi-annually payment bonds. Show your computation.
Par Value Coupon Rate Yield to Maturity Years to Maturity
$3000 8 12% 15
$3000 8 8 15
$3000 8 4 15
a) Indicate which bond is selling at discount, par, and premium. (Use the formula.)
b) What is the relationship between bond prices and interest rates?