If the Final Expressions in a Present Value Equation Used

question 181

Multiple Choice

If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$75 / (1 + .04) ⁶] + [$2,500 / (1 + .04) ⁶]," which of the following is correct?

• A)The face value is $2,500,the coupon is $75,and the coupon will mature in 4 years.
• B)The face value is $75,the interest rate you need is 1.04 percent,and the coupon will mature in 6 years.
• C)The face value is $2,500,the interest rate you need is 6 percent,and the coupon will mature in 4 years.
• D)The coupon is $75,the interest rate you need is 4 percent,and the coupon will mature in 6 years.

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Definitions:

Exhaustion Stage

The final stage of the General Adaptation Syndrome where the body's ability to resist stress and adapt is depleted, leading to increased susceptibility to illness and disease.

General Adaptation Syndrome

A triphasic sequence (alarm, resistance, exhaustion) that outlines the bodily responses experienced during stress.

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) that the body goes through under prolonged stress.

General Adaptation Syndrome

A model describing the body's stress response in three stages: alarm, resistance, and exhaustion.