WPI Has a Bond Issue Outstanding That Has a Coupon

question 103

Multiple Choice

WPI has a bond issue outstanding that has a coupon rate of 10% and a current yield of 11%. The yield to maturity on this bond is 12%. What is the market price, to the nearest dollar, of the WPI bond if it pays interest semiannually and has 10 years to mature?

• A) $941
• B) $1,021
• C) $1,000
• D) $885

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Definitions:

William Smith

An English geologist credited with creating the first nationwide geological map and pioneering the use of fossil sequences to date rock strata.

Natural Theology

The study of nature and the physical universe as a means of understanding the existence and attributes of a divine creator.

William Paley

An English clergyman and philosopher known for formulating the watchmaker analogy, arguing for the existence of God based on the complexity of nature.

Influential Text

A written work that has significant impact on the thinking or behavior of individuals or society as a whole.