The Present Value PV of a Bond with a Face

question 23

Multiple Choice

The present value PV of a bond with a face value 1000,a coupon rate 5% paid annually and 2 years to maturity at the interest rate per annum 6% is:

• A)981.67.
• B)937.17.
• C)934.50.
• D)1093.40.

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Definitions:

Enterprise Resource Planning

A software system that allows an organization to manage and integrate important parts of its business.

Part-Period Algorithm

A decision rule used in inventory management to determine the optimal time and quantity for reordering inventory.

Holding Cost

The expenses associated with storing inventory or goods before they are sold, including warehousing, insurance, and depreciation.

Setup Costs

The expenses incurred to prepare equipment or a process for manufacturing an order or batch of goods.