Seventeen Years After It Was First Issued at 11% Compounded

question 192

Multiple Choice

Seventeen years after it was first issued at 11% compounded semi-annually, a 30-year, $1,000 strip bond was sold on the bond market at a price that would provide the purchaser with a yield rate of 6.4% compounded semi-annually. What was the selling price at that time?

• A) $440.89
• B) $342.68
• C) $248.56
• D) $161.96
• E) $103.78

---

Definitions:

Syndicate

A group of individuals or organizations combined to promote some common interest.

Business Organization

A legal entity formed to conduct business, including structures like corporations, partnerships, and sole proprietorships.

Federal Income Tax

A tax levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Sole Member

The only individual in ownership or participation of an entity, such as a single-member LLC.