Consider a Bond with a Face Value of $1,000, a Coupon

question 40

Multiple Choice

Consider a bond with a face value of $1,000, a coupon rate of 6%, a yield to maturity of
8%, and ten years to maturity. This bond's duration is:

• A) 8.7 years
• B) 7.6 years
• C) 0.1 years
• D) 6.5 years

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Definitions:

Cash Flow Problems

Situations where a business struggles to manage the timing and amounts of cash inflows and outflows, affecting its ability to meet financial obligations.

Federal Regulations

Laws established by federal agencies that dictate the conduct of individuals, businesses, and other entities.

Net Income

The total revenue minus total expenses, representing the profit or loss over a specific period.

Interest-Bearing Note

A debt instrument that pays interest to the holder at a fixed or variable rate until it matures.