Assume a Consol, That Is, a Bond Without Maturity Date

question 45

Multiple Choice

Assume a consol, that is, a bond without maturity date that pays $800 for each year you own it.What is the current price of this consol, if the market interest rate is i = 8%?

• A)$10,000
• B)$6,400
• C)$4,000
• D)$1,000
• E)the price would depend on how long you plan to own this consol

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