A firm issues two-year bonds with a coupon rate of 6.7%, paid semiannually. The credit spread for this firm's two-year debt is 0.8%. New two-year Treasury notes are being issued at par with a coupon rate of 3.1%

What should the price of the firm's outstanding two-year bonds be per $100 of face value?
A) $126.40
B) $147.47
C) $84.27
D) $105.34

Answer: D