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What is maximum price should be willing to pay for ibm bond

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Reference no: EM132973070

Problem 1: You are considering buying a 10-year, $1,000 par value bond issued by IBM. The coupon rate is 8% annually, with interest being paid semiannually. If you expect to earn a 10% rate of return on this bond, what is the maximum price you should be willing to pay for this IBM bond?

Option 1: $898.54

Option 2: $875.39

Option 3: $911.46

Option 4: $189.93

Reference no: EM132973070

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