Answer:
$ 101.39
Explanation:
The new coupon rate would be the treasury rate plus 280bp which is 5%+2.8%=7.8%
The new yield to maturity would be 7%+0.5%=7.5%
Note that 100 basis point is 1%
The new price can be computed using excel pv formula
new price=-pv(rate,nper,pmt,fv)
rate is the semiannual yield i.e 7.5%*6/12=3.75%
nper is the number of semiannual coupons of the bond i.e 5.78*2=11.56
pmt is the semiannual coupon =$100*7.8%*6/12=$3.9
face value is $100
=-pv(3.75%,11.56,3.9,100)=$101.39
