A firm issues

20

-year

bonds with a coupon rate of

4.1

%,

paid semiannually. The credit spread for this firm's

20

-year

debt is 1.2%. New

20

-year

Treasury notes are being issued at par with a coupon rate of

5

%.

What should the price of the firm's outstanding

20

-year

bonds be if their face value is $1000?

A.

$ 761.17

B.

$ 1065.64

C.

$ 48.00

D.

$ 608.94