If the Interest Rate of a One-Year Bond Is 10

question 86

Multiple Choice

If the interest rate of a one-year bond is 10% and its face value is $5,000,the dollar price of the bond is:

• A) $5,000.00.
• B) $5,500.00.
• C) $4,545.45.
• D) $5,250.50.
• E) $454.00.

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Definitions:

Exit Value

The estimated amount that an asset or investment could be sold for at the end of its useful life.

Economic Resource

Assets or inputs that have the potential to contribute to the production of goods and services, providing economic benefit to businesses or individuals.

Asset

Resources owned or controlled by a business, projected to bring future economic benefits.

Measurement Alternative

An accounting option that allows entities to measure certain investments at cost, minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.