How Much Would an Investor Expect to Pay for a $1,000

question 58

Multiple Choice

How much would an investor expect to pay for a $1,000 par value bond with a 9% annual coupon that matures in 5 years if the interest rate is 7%?

• A) $696.74
• B) $1,075.82
• C) $1,082.00
• D) $1,123.01

---

Definitions:

Substantive Due Process

A principle allowing courts to protect certain fundamental rights from government interference, even if procedural protections are provided.

Takings Clause

A clause in the Fifth Amendment of the U.S. Constitution requiring that when government uses its power to take private property for public use, it must pay the owner just compensation, or fair market value, for the property. Also called just-compensation clause.

Just Compensation

The fair payment required to be given to a property owner when their property is taken for public use, under eminent domain.

Self-Incrimination

The act of exposing oneself to prosecution by being forced to respond to questions or by providing evidence in a legal proceeding.