Assume that you are considering the purchase of a 10-year bond with a coupon rate of 4.0%. The bond has a par value of $1,000 and makes semi-annual interest payments. If you require a 2.5% yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

Select one:

a. $1,204.52

b. $1,053.20

c. $1,131.99

d. $1,240.16

e. $1,150.23