All Three Bonds Pay Interest Annually

question 32

Multiple Choice

$\begin{array}{l}\text { The following information relates to Questions } 15 - 17\\\begin{array} { l c c c c } \hline \text { Bond } & \text { Coupon Rate } & \text { Time-to-Maturity } & \text { Time-to-Maturity } & \text { Spot Rates } \\\hline \mathrm { X } & 8 \% & 3 \text { years } & 1 \text { year } & 8 \% \\\mathrm { Y } & 7 \% & 3 \text { years } & 2 \text { years } & 9 \% \\\mathrm { Z } & 6 \% & 3 \text { years } & 3 \text { years } & 10 \% \\\hline\end{array}\end{array}$
All three bonds pay interest annually.
-based upon the given sequence of spot rates, the price of bond x is closest to:

• A) 95.02.
• B) 95.28.
• C) 97.63.

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Definitions:

Flexible Budget

A flexible budget adjusts based on changes in actual revenue or level of activity, allowing organizations to better control costs and manage performance.

Static Planning Budget

A budget based on a fixed level of activity and does not change in response to variations in activity levels.

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A metric used in healthcare management to denote the number of times patients visit or are seen by healthcare providers.

Activity Variances

The differences between the expected costs based on the predetermined overhead rate and the actual costs incurred.