Suppose That a Bond with a Face Value of $10,000

question 42

Multiple Choice

Suppose that a bond with a face value of $10,000 and coupon rate of 7% matures a year from now. It is selling for $9,880. What interest rate would make a person indifferent between the selling price of $9,880 and the bond payment (face value and coupon) one year from now?

• A) 7%
• B) 5.7%
• C) 1.3%
• D) 8.3%

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Definitions:

Economic Responsibility

The obligation of organizations to make decisions that positively impact the economic environment in which they operate, including considerations of sustainability and ethical business practices.

Socially Responsible Corporate Behaviour

Acts by businesses that go beyond economic and legal expectations to positively impact society and the environment.

Economic Responsibility

An entity's accountability for its impact on economic systems, including sustainable financial practices and contributions to economic development.

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