Answer:
$889.28
Explanation:
The price of the bond can be computed using the below formula for bond price calculation:
bond price=face value/(1+r)^n+coupon*(1-(1+r)^-n)/r
face value is $1000
r is the yield to maturity which is 11.2%
coupon=face value*coupon rate=1000*9.4%=94
n is the number of coupons the bond would pay which is 11 coupons over 11 years
bond price=1000/(1+11.2%)^11+94*(1-(1+11.2%)^-11)/11.2%
bond price=$889.28
