If the Dollar Price of a Bond Is $4,000 and Its

question 28

Multiple Choice

If the dollar price of a bond is $4,000 and its face value is $4,250,the interest rate is equal to:

• A) 5.9%.
• B) 5%.
• C) 6.67%.
• D) 6.25%.
• E) 10%.

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Definitions:

Breach

To violate a law, by an act or an omission, or to break a legal obligation that one owes to another person or to society.

Illegal Contract

An agreement that is either unlawful in nature or made with the purpose of undertaking an illegal act, and thus, is not enforceable by law.

Executory

Pertaining to contracts or agreements that are not yet fully performed or completed by all involved parties.

Enforce

To compel observance of or obedience to a law, rule, or obligation.