If a Bond Offers $400 in Interest Payments at the End

question 18

Multiple Choice

If a bond offers $400 in interest payments at the end of each of next 3 years and a repayment of $2,000 also at the end of the 3 years and the current discount rate is 5 percent, what is the market price for the bond?

• A)$2,256
• B)$2,817
• C)$3,589
• D)$2,593

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