If the Market Interest Rate Stays at I = 10

question 26

Multiple Choice

If the market interest rate stays at i = 10% over the next four years, what is the net present discounted value of a bond that pays $100 in coupon payments for each of the next four years and has a face value of $1,000?

• A)$1,100
• B)$1,000
• C)$980
• D)$900
• E)$800

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Definitions:

Deterioration

The process of becoming progressively worse.

Social Behavior

Actions or reactions of an individual in response to external or internal stimuli, within a social context.

Elders

Older individuals, often regarded with respect or veneration, who may hold positions of authority or influence within a community or family.

Interdependence

A relationship between individuals or groups that is mutually reliant, where actions of one party impact the other.