Pay for the bond and obtain effective annual yield

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A 20-year bond has 8% annual coupons, a par value of $1000, and a redemption value of $1000. Coupons are invested at a nominal annual rate of 5% convertible semi-annually. X is the highest price that an investor can pay for the bond and obtain an effective annual yield of at least 10%. Calculate X.

Reference no: EM131074633

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