The Following Information Relates to Problems

question 24

Multiple Choice

The following information relates to Problems
an investor purchases a nine-year, 7% annual coupon payment bond at a price equal to par value. after the bond is purchased and before the first coupon is received, interest rates increase to 8%. The investor sells the bond after five years. assume that interest rates remain unchanged at 8% over the five-year holding period.
-The capital gain/loss per 100 of par value resulting from the sale of the bond at the end of the five-year holding period is closest to a:

• A) loss of 8.45.
• B) loss of 3.31.
• C) gain of 2.75.

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Definitions:

Alignment

The process of adjusting or arranging various parts or aspects of something to achieve harmony, ensure proper positioning, or mutually reinforcing direction.

Synchronization

The process of coordinating or aligning processes, systems, or activities in time to achieve a coherent operation.

Rich Communication Medium

A means of communication that is capable of conveying a range of cues such as body language, tone of voice, and facial expressions, facilitating deeper understanding.

Perceived Fairness

The subjective judgment about the fairness or equity of social treatments and outcomes.