Consider a Bond with a Current Yield of 8% and a Price

question 19

Multiple Choice

Consider a bond with a current yield of 8% and a price of $1,250.What is this bond's coupon?

• A) 8.0%
• B) 10.0%
• C) 11.0%
• D) 8.5%
• E) 9.6%

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Definitions:

Paul Revere

An American silversmith and patriot in the American Revolution, best known for his midnight ride to alert colonial militia of British forces' approach.

Enlightenment Thought

A philosophical movement in the 17th and 18th centuries emphasizing reason, individualism, and skepticism toward traditional doctrines.

Newton

Sir Isaac Newton, an English mathematician, physicist, and astronomer who formulated the laws of motion and universal gravitation.

Locke

John Locke was a 17th-century English philosopher who laid much of the groundwork for the Enlightenment and contributed fundamentally to theories of governance, knowledge, and the self.