How Much Should You Be Prepared to Pay for a 10-Year

question 103

Multiple Choice

How much should you be prepared to pay for a 10-year bond with a 6% coupon and a yield to maturity of 7.5%?

• A) $411.84
• B) $897.04
• C) $985.00
• D) $1,000.00

---

Definitions:

Heuristic/Systematic Model

Theory that posits two routes to persuasion, via either conscious or automatic processing.

Personal Relevance Theory

A theory suggesting that people are more likely to be persuaded by messages that they find personally relevant or meaningful.

Peripheral Cue

A type of stimulus in persuasion that influences a person's attitude or behavior through indirect or secondary features, rather than the central message itself.

Central Route

A method of persuasion that involves deep processing of information, focusing on the arguments and content to change attitudes.