Consider a Bond That Promises to Make Coupon Payments of $100

question 17

Multiple Choice

Consider a bond that promises to make coupon payments of $100 each year for three years (beginning in one year's time) and also repays the face value of $2000 at the end of the third year. If the market interest rate is 4 percent, what is the present value of this bond?

• A)$1966.39
• B)$1866.67
• C)$2055.50
• D)$1941.57
• E)$288.45

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