A trust account is opened by an 88-year old uncle who is in declining health. The elderly man is the donor to the account and the terms of the trust state that the assets are to be managed for the benefit of the uncle to provide income until death, at which point the trust assets become the property of the uncle's 31-year old nephew. The nephew is an aggressive investor that is looking for growth. The trustee is obligated to manage the assets of the trust:

Bonds often pay a coupon twice a year. for the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. using the values of cash flows and number of periods, the valuation model is adjusted accordingly. assume that a $1,000,000 par value, semiannual coupon us treasury note with three years to maturity has a coupon rate of 3%. the yield to maturity (ytm) of the bond is 7.70%. using this information and ignoring the other costs involved, calculate the value of the treasury note: