To Determine the Present Value of a Bond That Pays

question 41

Multiple Choice

To determine the present value of a bond that pays semiannual interest, which of the following adjustments should not be made to compute the price of the bond?

• A) The annualized coupon should be split in half.
• B) The annual discount rate should be divided by 2.
• C) The number of annual periods should be doubled.
• D) The par value should be split in half.
• E) All of the above adjustments have to be made.

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Definitions:

Conditional Affection

Conditional affection is an emotional response or feeling of love that is dependent on the other person meeting certain conditions or expectations.

Congruence

The quality of agreeing, being in harmony, or corresponding directly with something else; often used in psychology to describe alignment between an individual’s self-perception and reality.

Self-Concept

An individual's comprehensive understanding and awareness of themselves, encompassing self-image, self-esteem, and the attitudes one holds about oneself.

Humanistic Approach

A psychological perspective that emphasizes the study of the whole person, looking at human behavior not only through the eyes of the observer, but also through the eyes of the person doing the behaving.