. Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 10.7% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

$982.48

Step-by-step explanation:

The maximum price you should pay would be the present value of the bond including its cash flows. That is how the price of a bond is computed.

The formula to calculate the price of a bond is;

The payments are semi annual so the variables will need to be converted to semi annual variables.

Coupon payment = 9.5% * 1,000 * 1/2

= $47.50

Number of periods = 20 years * 2 = 40 semi annual periods

Yield = 9.7%/2 = 4.85%

Price = $982.48

$982.48 should be the maximum price you should pay.

Alternatively, use a financial calculator and input the variables as;

Future Value = $1,000

Payment = $47.50

Number of Periods = 40

Rate = 4.85%

can someone answer this question plz

step-by-step explanation:

an

y = 6x -3y -12

y +3y +12 = 6x

=> . x = { 2y / 3 +2 } this is equation of line in terms of x

=> . if line meets the x-axis the co-ordinates of meeting point would be ( x , 0 )

=> . x = 2 ( 0 ) / 3 + 2

=> . x = 2

so, the point is ( 2 , 0 )