A 1000 par value bond pays annual coupons of 80. The bond is redeemable at par in 30 years, but is callable any time from the end of the 10th year at 1050. Based on her desired yield rate, an investor calculates the following potential purchase prices (P); i. Assuming the bond is called at the end of the 10th year, P = 957 il. Assuming the bond is held until maturity, P = 897 The investor buys the bond at the highest price that guarantees she will receive at least her desired yield rate regardless of when the bond is called. The investor holds the bond for twenty years, after which time the bond is called. Calculate the annual yield rate the investor earns. An investor purchases a 10-year callable bond with face amount of 1000 for price P. The bond has an annual nominal coupon rate of 10% paid semi-annually. The bond may be called at par by the issuer on every other coupon payment date, beginning with the second coupon payment date. The investor earns at least an annual nominal yield of 12% compounded semi-annually regardless of when the bond is redeemed Calculate the largest possible value of P