You Are Considering Investing in a Security That Matures in 10

question 48

Multiple Choice

You are considering investing in a security that matures in 10 years with a par value of $1,000. During the first five years, the security has an 8 percent coupon with quarterly payments (i.e., you receive $20 a quarter for the first 20 quarters) Another 10-year bond has an 8 percent semiannual coupon (i.e., the coupon payment is $40 every six months) . This bond is selling at its par value, $1,000. This bond has the same risk as the security you are thinking of purchasing. Given this information, what should be the price of the security you are considering purchasing?

• A) $ 898.65
• B) $1,060.72
• C) $1,037.61
• D) $ 943.22
• E) $1,145.89

---

Definitions:

Social Entrepreneurship

The use of startup companies and other entrepreneurs to develop, fund, and implement solutions to social, cultural, or environmental issues.

Ashoka's Fellows

A select group of social entrepreneurs recognized by the Ashoka organization for their innovative solutions to social problems, who are supported through funding and a global network.

Six Categories

A general phrase that could refer to the division of any subject or topic into six distinct segments or classifications for easier analysis and understanding.

Human Rights Movement

A global campaign advocating for the recognition and protection of individual rights and freedoms as outlined in the Universal Declaration of Human Rights and other legal instruments.