Suppose That All Investors Expect That Interest Rates for the 4

question 10

Multiple Choice

Suppose that all investors expect that interest rates for the 4 years will be as follows: What is the price of a 2-year maturity bond with a 5% coupon rate paid annually? (Par value = $1,000.)

• A)$1,092.97
• B)$1,054.24
• C)$1,028.51
• D)$1,073.34

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