You have been given the opportunity to purchase a bond


You have been given the opportunity to purchase a bond issued by the famous XYZ Corporation. The bond has 10 years to maturity, par value of $1000, a coupon rate of 12%, and pays interest semi-annually. If you purchase the bond, you will have to withdraw funds from your savings account that provide you with a guarantee 8% interest per year; interest is paid semi-annually. What is the maximum price you would pay for the XYZ Bond?

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Risk Management: You have been given the opportunity to purchase a bond
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