Answer:
A bond with a coupon rate of 6 percent that pays interest semiannually and is priced at par will have a market price equal to its par value, which is typically $1,000. Therefore, the market price of the bond will be $1,000.
Since the bond pays interest semiannually, the coupon payments will be divided into two equal payments over the course of the year. To calculate the amount of each interest payment, we can use the formula:
Interest Payment = Coupon Rate * Face Value / Number of Coupon Payments per Year
In this case, the coupon rate is 6 percent, the face value is $1,000, and the number of coupon payments per year is 2 (semiannual payments). Plugging in these values:
Interest Payment = 0.06 * $1,000 / 2 = $30
Therefore, the bond will have interest payments in the amount of $30 each.
