You Are Purchasing a Bond with a Face Value of $3,000

question 62

Multiple Choice

You are purchasing a bond with a face value of $3,000 and a coupon rate of 5.45 percent.The bond pays interest semiannually and has a yield to maturity of 5.51 percent.The bond matures in 7.5 years and pays its next interest payment in 4 months.What amount of accrued interest must you pay to purchase this bond today?

• A)$25.50
• B)$27.25
• C)$51.00
• D)$37.75
• E)$54.50

---

Definitions:

Economic Activities

Actions that involve the production, distribution and consumption of goods and services at all levels within a society.

Legal Right

An entitlement or justified claim enforceable by law, providing individuals or groups with autonomy or protection in certain aspects of their lives.

Resource Allocation

The process of distributing available resources among different uses identified in an economy.

Taxing Polluters

A policy approach that imposes taxes on companies or individuals who produce pollution as a means to internalize environmental externalities and encourage pollution reduction.