Assume That You Wish to Purchase a 20-Year Bond That

question 32

Multiple Choice

Assume that you wish to purchase a 20-year bond that has a maturity value of $1,000 and makes semiannual interes payments of $40.If you require a 10 percent simple yield to maturity on this investment, what is the maximum price should be willing to pay for the bond?

• A)$619
• B)$674
• C)$761
• D)$828
• E)$902

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