A 5-Year Bond Has a Face Value of $1,000,matures in 5

question 57

Multiple Choice

A 5-year bond has a face value of $1,000,matures in 5 years,pays interest semiannually,and has a coupon rate of 6.35 percent.The next interest payment will be paid 2 months from today.What is the dirty price of this bond if the market rate of return is 6.2 percent?

• A)$985.20
• B)$993.70
• C)$1,006.37
• D)$1,027.54
• E)$1,014.10

---

Definitions:

P(x = a)

The probability that the random variable X is equal to some value a.

Continuous Random Variable

A type of random variable that can take an infinite number of possible values in a continuum or interval on the number line.

P(x > a)

Represents the probability of a random variable X taking a value greater than a specific number a.

P(x = a)

Represents the probability that a discrete random variable X takes on a specific value a.