Semiannual Payment Bonds with the Same Risk (Aaa)and Maturity (20

question 88

Multiple Choice

Semiannual payment bonds with the same risk (Aaa) and maturity (20 years) as your company's bonds have a simple (not effective annual rate) yield of 9 percent.Your company's treasurer is thinking of issuing at par some $1,000 par value,20-year,quarterly payment bonds.She has asked you to determine what quarterly interest payment,in dollars,the company would have to set in order to provide the same effective annual rate (EAR) as those on the 20-year,semiannual payment bonds.What would the quarterly interest payment be,in dollars?

• A) $45.00
• B) $25.00
• C) $22.25
• D) $27.50
• E) $23.00

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Definitions:

Polycystic Kidney Disease

A genetic disorder characterized by the growth of numerous cysts in the kidneys, which can lead to impaired kidney function and kidney failure.

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The presence of blood in the urine.

First Morning Urine Specimen

A urine specimen that is collected after a night’s sleep; contains greater concentrations of substances that collect over time than specimens taken during the day.