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 10.7% nominal yield to maturity on this investment,what is the maximum price you should be willing to pay for the bond?
A) $721.44
B) $910.81
C) $901.80
D) $874.74
E) $1,000.99
Correct Answer:
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