A $1000 par value 6% bond with semiannual coupons matures at the end of 10 years. The bond is callable at $1050 at the ends of years 4 through 6, at $1025 at the ends of years 7through 9, and at $1000 at the end of year 10. Find the maximum price that an investor can pay and still be certain of a yield rate of 4 % convertible semiannually.
a) Price if called in the window of ends of years 4 through 6:
b) Price if called in the window of ends of years 7 through 9:
c) Price if called at maturity (end of year 10):
d) Maximum price that an investor can pay and still be certain of a yield rate of 4% convertible semiannually.