You Are Offered a R1,000 Par Value Bond Which Has

question 3

Multiple Choice

You are offered a R1,000 par value bond which has a stepped-up coupon interest rate.The annual coupon rate is 10 percent coupon, payable semi-annually (R50 each 6 months) for the first 15 years, and then the annual coupon increases to 13 percent, also payable semi-annually, for the next 15 years.The first interest payment will be made 6 months from today, and the R1,000 principal amount will be returned at the end of Year 30.You currently have savings in an account which is earning a 9 percent simple rate, but with quarterly compounding; this is your opportunity cost for purposes of analysing the bond.What is the value of the bond to you today?

• A) R1,614.53
• B) R1,419.18
• C) R1,306.21
• D) R1,250.25
• E) R1,155.98

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Socioeconomic Background

The social and economic factors that characterize the environment in which a person is raised, including income level, education, and occupational status.

Fully Functioning Person

Rogers’ term for self-actualization, for developing all facets of the self.

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The process of realizing or fulfilling one's talents, capabilities, and potential, forming the basis of self-actualization in humanistic psychology.

Liberal Religious Views

Religious beliefs that typically emphasize personal freedom, tolerance for diversity, and a questioning approach to traditional doctrines.