When the Interest Rate Is 10 Percent, What Is the Price

question 2

Multiple Choice

When the interest rate is 10 percent, what is the price of a bond that matures in one year, has a $300 face value, and has a coupon of $20 per year?

• A)$93.24
• B)$266.11
• C)$272.72
• D)$290.90
• E)$282.64

---

Definitions:

Dialectical Reasoning

A method of argument for resolving disagreement that involves the exchange of arguments and counter-arguments, aiming to find the truth through reasoned dialogue.

Contextual Intelligence

The aptitude to understand and apply knowledge effectively across varied situations by keenly evaluating the contextual factors.

Factor Analysis

A statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors.

Justification of Effort

The tendency for individuals to attribute a greater value to an outcome they had to put effort into achieving or acquiring.