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a) Daphne purchased a $4000, 7% bond that pays semiannual coupons and is redeemable at par value at the end of 15 years. The bond can be called at $4200 at the end of year 10. Calculate the maximum price of the bond to guarantee that Daphne will earn an annual nominal interest rate of at least 6% convertible semiannually. (2 decimals)

b) Simon purchased a 15-year par value bond with an annual nominal coupon rate of 6% payable semiannually at a price of 1356.89. The bond can be called at par value F on any coupon date starting at the end of year 5. If the lowest yield rate that Simon can possibly receive is an annual nominal rate of 5% convertible semiannually, calculate the par value F.

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