Which of the Following Best Shows the Timeline for Cash

question 87

Multiple Choice

Which of the following best shows the timeline for cash flows from a five-year bond with a face
value of $2,000, a coupon rate of 4.2%, and semiannual payments?

• A) \[\begin{array} { l llllll }
• 0 & 1 & 2 & 3 && 9 & 10 \\
• + \cdots &+ \ldots &+ \ldots &+ \cdots & \ldots & \ldots + \ldots &+\\
• &\$42&\$42&\$42&&\$42&\$2,042
• \end{array}\]
• B) \[\begin{array} { l llllll }
• 0 & 1 & 2 & 3 && 9 & 10 \\
• + \cdots &+ \ldots &+ \ldots &+ \cdots & \ldots & \ldots + \ldots &+\\
• &\$17.50&\$17.50&\$17.50&&\$17.50&\$2,017.50
• \end{array}\]
• C) \[\begin{array} { l llllll }
• 0 & 1 & 2 & 3 && 9 & 10 \\
• + \cdots &+ \ldots &+ \ldots &+ \cdots & \ldots & \ldots + \ldots &+\\
• &\$48&\$48&\$48&&\$48&\$48
• \end{array}\]
• D) \[\begin{array} { l lllll }
• 0 & 1 & 2 & 3 & 4 & 5 \\
• +----&+----&+----&+----&+----&+\\
• &\$84&\$84&\$84&\$84&\$2,084
• \end{array}\]

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Definitions:

Ordered Pairs

A pair of elements (x, y), representing coordinates on a Cartesian plane.

Equation

An assertion in mathematics indicating that two expressions, often incorporating variables, are equivalent.

Line Segments

A line segment is a part of a line that is bounded by two distinct end points, and contains every point on the line between its endpoints.

Points

Locations in space defined by their coordinates on a graph or geometric context.