You Are in Possession of a Bond That Has 3

question 20

Multiple Choice

You are in possession of a bond that has 3 years remaining to maturity.The original maturity on the bond was 30 years.The bond has a $1,000 face value and a 9% coupon rate.If interest is paid annually and bonds with similar risk currently have an interest rate of 10%,what is the current value of the bond?

• A) $906
• B) $975
• C) $1,000
• D) $1,025
• E) $1,103

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Definitions:

Human Genome

Complete sequence of genes in the human body.

Genes

Units of heredity made up of DNA, located on chromosomes, that carry the instructions for the development, functioning, growth, and reproduction of all known organisms.

Analogous

Similar or comparable in certain respects, typically allowing for a comparison to be made.

Ovulation

The phase in the menstrual cycle when a mature egg is released from the ovary, making it available for fertilization.