Question
On June 15, 2015, a company issues an 8% semiannual bond with a face value of $1,000,000 . This bond will be redeemed, according to
On June 15, 2015, a company issues an 8% semiannual bond with a face value of $1,000,000. This bond will be redeemed, according to the policies of the company, in any of the coupon payment dates between 2026 and 2027 with a redemption value of $1,000,000, on any of the coupon payment dates between 2028 and 2030 with a redemption value of $1,200,000, or on any of the coupon payment dates between 2031 and June 15, 2033 with a redemption value of $1,300,000. Find the purchase price to have nominal returns of (a) 10% and (b) 6.5%.
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Note: Please answer in detail showing every step, thank you. ( And please do not copy previous chegg answers)
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