Explore BrainMass
Share

What is the maximum price you should be willing to pay for the bond?

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

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?

© BrainMass Inc. brainmass.com October 16, 2018, 9:43 pm ad1c9bdddf
https://brainmass.com/economics/bonds/what-is-the-maximum-price-you-should-be-willing-to-pay-for-the-bond-194996

Solution Preview

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 ...

Solution Summary

This solution provides the step-by-step calculations fanbd explaination for the price you would be willing to pay for the bond.

$2.19
Similar Posting

Calculating the Maximum Price to Pay for a Bond

Assume that you wish to purchase a 10-year bond that has a maturity value of $1,000 and makes semiannual interest payments of $50. If you require a 10 percent nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

View Full Posting Details