Problem:
A 10-year bond pays semi-annual coupons, the first of which is $50 payable 6 months from now. Each subsequent semiannual coupon decreases by 3% each 6 months. The bond will be redeemed for $1,200 and it is priced to yield 4% annual effective.
Required:
Question: Determine the price of the bond.
Note: Please explain comprehensively and give step by step solution.