Problem:
A $1000 par value bond has 11% semiannual coupons and is redeemable for $1100 on any coupon date from the 11th coupon through the 20th coupon, for $1150 on any coupon date from the 21st coupon through the 30th coupon, and for $1200 on any coupon date from the 31st coupon through the 40th coupon.
Required:
Question: What is the highest price that an investor can pay for the bond and still be certain of a yield of 9% compounded semiannually.
Note: Please provide through step by step calculations.