If the Final Expressions in a Present Value Equation Used

question 191

Multiple Choice

If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$50 / (1 + .08) ³] + [$500 / (1 + .08) ³]," which of the following is correct?

• A)The face value is $500,the coupon is $50,and the coupon will mature in 3 years.
• B)The face value is $50,the interest rate you need is 8 percent,and the coupon will mature in 3 years.
• C)The face value is $500,the interest rate you need is 3 percent,and the coupon will mature in 8 years.
• D)The coupon is $50,the interest rate you need is 1.08 percent,and the coupon will mature in 3 years.

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Definitions:

Intrinsic Motivation

Act of doing something for its inherent satisfaction rather than for some separable consequence or external reward.

Academic Stability

The ability to maintain consistent academic performance and engagement over time.

Extrinsic Motivation

Motivation that is driven by external rewards such as money, fame, grades, or praise.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to increased interconnectedness and interdependence of countries.