A Bond with Two Years Remaining Until Maturity Offers a 3

question 25

Multiple Choice

A bond with two years remaining until maturity offers a 3% coupon rate with interest paid annually. At a market discount rate of 4%, the price of this bond per 100 of par value
Is closest to:

• A) 95.34.
• B) 98.00.
• C) 98.11.

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Definitions:

Effectiveness

The degree to which something achieves its intended outcome or successfully produces a desired result.

Durability

The ability of a product or material to withstand wear, pressure, or damage, indicating its quality and longevity.

Equity

The principle of fairness or justice in the way people are treated within social, economic, and legal contexts.

Informal Rewards

Non-monetary or unofficial incentives given to employees, such as praise, recognition, or additional responsibilities, to motivate and encourage positive behaviour.