A 7 Percent Coupon Bond Has a Face Value of $1,000

question 9

Multiple Choice

A 7 percent coupon bond has a face value of $1,000 and pays interest annually. The current yield is 7.3 percent. What is the current price of this bond?

• A)$958.90
• B)$978.41
• C)$1,068.00
• D)$1,029.41
• E)$1,104.00

---

Definitions:

Extraction Cost

The expenses associated with the removal of raw materials or resources from their natural setting, which can include labor, equipment, and operational costs.

User Cost

The cost associated with using a capital asset, considering both the depreciation of the asset and the foregone interest that could have been earned by investing funds elsewhere.

Nonrenewable Resource

A natural resource that cannot be replenished at the same rate at which it is consumed.

Future

A term referring to events that have not yet occurred or financial contracts regarding assets to be delivered or transacted at a later date.