1. A firm has a bond issue maturing in seven years with par value of $1,000. Those bonds make annual coupon payments of $70. The market interest rate on similar bonds is 8.50%. What is the bond’s price (round your answer to two decimal places)?
2. Assume that you are considering the purchase of a 15-year bond with a coupon rate of 9.50%. The bond has a par value of $1,000 and makes semiannual interest payments. If you require an 11.00% yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond (round your answer to two decimal places)?