A Bond Has a Par Value of $1,000, a Time

question 122

Multiple Choice

A bond has a par value of $1,000, a time to maturity of 20 years, a coupon rate of 10% with interest paid annually, a current price of $850, and a yield to maturity of 12%. Intuitively and without using calculations, if interest payments are reinvested at 10%, the realized compound yield on this bond must be

• A) 10.00%.
• B) 10.9%.
• C) 12.0%.
• D) 12.4%.
• E) None of the options are correct.

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Definitions:

Neurotransmitter Abnormality

An irregularity or imbalance in the chemicals in the brain that transmit signals between nerve cells, potentially leading to various neurological or psychological conditions.

Social Anxiety Disorder

A mental health condition where an individual experiences intense fear of social situations and being negatively judged or rejected by others.

Biological Treatment

Therapies that affect the body's biological function to treat mental health disorders, such as medication or electroconvulsive therapy.

Antidepressant Medication

Drugs prescribed to alleviate symptoms of depression by adjusting the levels of neurotransmitters in the brain.