Julia Just Purchased a $1,000 Par Value Bond with a 10

question 56

Multiple Choice

Julia just purchased a $1,000 par value bond with a 10 percent annual coupon rate and a life of 20 years. The bond has four years remaining until maturity, and the yield to maturity is 12 percent. How much did Julia pay for the bond?

• A) $1,063.40
• B) $1,000
• C) $939.25
• D) none of the above

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Definitions:

Skeletal

Relating to or constituting the framework of bones that supports the body.

Smooth

Relating to or having an even and continuous surface or texture; typically free from perceptible projections, lumps, or indentations.

Involuntary

Occurring without the individual's conscious control; often refers to physiological responses or reflex actions.

Cardiac

Pertaining to the heart and its functions.