Explain maximum price that can be paid for the bond

Reference no: EM1314446

Explain Maximum price that can be paid for the bond

Assume that you are considering the purchase of a 15-year bond with an annual coupon rate of 9.5%. The bond has face value of $1,000 and makes semi-annual interest payments. If you require an 11.0% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

Reference no: EM1314446

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