Compute what is the maximum price should be willing to pay

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Problem 1: Assume that you are considering the purchase of a 10 year bond with an annual coupon rate of 7.50%. The bond has a face value of $1,000 and makes semiannual interest payments. If you require a 6.50% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for this bond?

Reference no: EM132696456

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