Question: Problem 4. Joey purchases a 15-year par value bond with semiannual coupons of $60 and a redemption value of $1,200. The bond can be called

Problem 4. Joey purchases a 15-year par value bond with semiannual coupons of $60 and a redemption value of $1,200. The bond can be called at $1,300 on any coupon date prior to maturity, starting at the end of year 10. Calculate the maximum price of the bond to guarantee that Joey will earn an annual nominal interest rate of at least 8% convertible semiannually.

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