Question: Problem 1 : You are considering investing in a 10-year bond issued by NewEnergy Inc. This bond has $1000 face value, 4% coupon rate. The

Problem 1: You are considering investing in a 10-year bond issued by NewEnergy Inc. This bond has $1000 face value, 4% coupon rate.
The bond pays coupons semi-annually and is currently selling at $920. The bond can be called at a $1,040 in 3 years.
1.a. (10 points): If your required rate of return if 6% for bonds in this risk class, what is the maximum price you should pay for this bond? (Use PV function)
Coupon rate=
Required return= N=
Years to maturity= I/Y=
Payment frequency= FV=
Face Value= PMT=
Call price= PMT Type=
Current market price= PV=
the maximum price you should pay for this bond:

1.b. (10 points) What is the current yield of this bond?
Current yield =

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