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A 15year, 6% semiannual corporate bond has the following risk premiums: Inflation risk premium = 100 bps Maturity risk premium = 75 bps Liquidity risk

A 15year, 6% semiannual corporate bond has the following risk premiums:

Inflation risk premium = 100 bps

Maturity risk premium = 75 bps

Liquidity risk premium = 50 bps

If the real riskfree rate is 5%, calculate the market price of the bond.

Group of answer choices

a. $692.55.

b. $1,000.

c. $886.83.

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