What is the highest price that can be paid

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Question - Bond A is a 1,000 par value bond with 4% semiannual coupons that matures at par in 20 years. It can be purchased for 1,200. Bond B is a 1,000 par value bond with 4% semiannual coupons that matures at 1,100 in 20 years. The bond can be called by the issuer with a redemption of 1,100 on any coupon due date on or after 5 years. What is the highest price that can be paid for Bond B to ensure a minimum yield rate that is equal to the yield rate on Bond A?

Reference no: EM132951813

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