Answer: $928.70

For a **Treasury bond**, use **actual/actual** timing and discount the remaining cash flows at the semiannual yield. - Coupon payment = $1,000 × 4% / 2 = **$20** - Yield per semiannual period = **6% / 2 = 3%** - Remaining coupons = **10** - Days from Apr 4 to next coupon Jul 1 = **88** days - Days in coupon period Jan 1 to Jul 1 = **181** days - Time to first cash flow = \(88/181\) of a semiannual period Dirty price: \[ P = \sum_{k=0}^{9} \frac{20}{(1.03)^{k + 88/181}} + \frac{1000}{(1.03)^{9 + 88/181}} \] This gives approximately: \[ P \approx 928.70 \] So the correct answer is **$928.70**.

Author: Manit Arora