10

Assume that you wish to purchase a 20-year bond that has a maturity value of $1,000 and makes semi-annual interest payments of $40. If you require a 10% per annum nominal yield to maturity (5% effective semiannual yield) on this investment, what is the maximum price you should be willing to pay for the bond? O a. $489 O b. $902 O C. $761 Od. $828 e. $572