Question
Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon rate of 9.5%. The bond has a face value
Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 12.7% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
| a. | $901.80 | |
| b. | $674.76 | |
| c. | $1243.46 | |
| d. | $833.43 | |
| e. | $769.5 |
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Bond Markets Analysis and Strategies
Authors: Frank J.Fabozzi
9th edition
133796779, 978-0133796773
