A 20-Year Bond with a Par Value of $1,000 Has

question 4

Multiple Choice

A 20-year bond with a par value of $1,000 has a 9 percent annual coupon. The bond currently sells for $925. If the bond's yield to maturity remains at its current rate, what will be the price of the bond 5 years from now?

• A) $ 966.79
• B) $ 831.35
• C) $1,090.00
• D) $ 933.09
• E) $ 925.00

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Definitions:

Purchase Returns

Transactions where buyers return previously purchased merchandise to the seller, resulting in a reduction of cost of goods sold for the seller and a refund or credit for the buyer.

Freight-In

The shipping cost for merchandise transported into a company's inventory, typically considered part of the cost of goods sold.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period detailing revenues, expenses, profits, and losses.

Comparability

The quality that allows users to analyze and recognize similarities and differences between two or more items of financial information.