About the minimum selling price for the bond

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Reference no: EM13721025

You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous owner received a semi annual interest payment. The bond rate is 6.6% per year payable semi annually. You plan to hold the bond for 3 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 9% per year compounded semi annually, what will be your minimum selling price for the bond?

Reference no: EM13721025

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