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    Bond valuation

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    Bond value - semiannual payment
    Assume that you wish to purchase a 25-year bond that has a maturity value of $1,000 and makes semiannual interest payments of $45. If you require a 7 percent nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

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    Solution Preview

    The maximum price would be the present value of interest and principal. Interest amount is $45, ...

    Solution Summary

    The solution explains how to determine the value of a bond