Bond Price: Jeremy Kohn Is Planning to Invest in a 10-Year

Multiple Choice

Bond price: Jeremy Kohn is planning to invest in a 10-year bond that pays a 12 percent coupon. The current market rate for similar bonds is 9 percent. Assume semiannual coupon payments. What is the maximum price that should be paid for this bond? (Round to the nearest dollar.)

A) $951
B) $882
C) $1,033
D) $1,195