If a Bond Was to Pay Off One Year from Now

question 89

Multiple Choice

If a bond was to pay off one year from now for $321 and the interest rate is 7 percent, what is the price of the bond?

• A) $147
• B) $279
• C) $300
• D) $342

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Definitions:

Individual Firm

An independently owned and operated company that is limited in size and in revenue depending on the industry.

Industry

Refers to a group of companies that are related based on their primary business activities.

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be eliminated through diversification.

Rate of GDP Growth

The annual percentage increase in a country's gross domestic product, indicating the pace at which its economy is expanding or contracting.