Assume That You Are Considering the Purchase of a 15-Year

question 150

Multiple Choice

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 semiannual 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?

• A)$891.00
• B)$913.27
• C)$936.10
• D)$959.51

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Definitions:

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