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 a 10.7% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? $910.81 $901.80 $874.74 $1,000.99 O $721.44 Hide question 19 feedback You are asked to solve for the price of the bond, that is, you have to solve for the present value. Be careful, this is a problem related to semiannual coupun paying bonds. Financial Calculator: N = years to maturity x 2; PMT = (Annual coupon rate x face value (i.e. par value) of bond)/2; FV = Maturity value (i.e., face value); I/Y = investor's required rate of return (market's required rate of return)/2 CPT PV Excel Built-in PV function: =PV(rate, nper, pmt, fv,type) where rate = investor's required rate of return (market's required rate of return)/2; nper = years to maturity x 2 ; pmt = (Annual coupon rate x face value (i.e. par value) of bond)/2; fv = Maturity value (i.e., face value). We can either assign 0 to Type or we can just omit it