Question: please solve this problem without using excel and show all steps. 8 Lisa Carr purchased a newly-issued 25-year bond that pays semi-annual coupons at an
8 Lisa Carr purchased a newly-issued 25-year bond that pays semi-annual coupons at an 8% (annual) rate. The bond has a par value (and a redemption value) of 1,000. The bond is callable on or after its 10th anniversary with a 10% call premium (i.e., 1,100 is payable if it is called). Lisa purchased this bond at issue at a price that will assure.her a rate of return of at least 7.5% (a nominal rate, convertible semi-annually). If the bond is called on its 12th anniversary, what is Lisa's actual rate of return? A) 7.5% B) 7.6% C) 7.7% D) 7.8% E) 7.9%
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