If a $1,000 Five-Year Bond That Was Issued at an Interest

question 3

Multiple Choice

If a $1,000 five-year bond that was issued at an interest rate of 7% is offered for sale one year before it matures, and the current interest is 5%, how much should an investor be willing to pay for it?

• A) $1,019
• B) $1,124
• C) $1,050
• D) $952

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