How Much Would an Investor Expect to Pay for a $1,000

question 58

Multiple Choice

How much would an investor expect to pay for a $1,000 par value bond with a 9% annual coupon that matures in 5 years if the interest rate is 7%?

• A) $696.74
• B) $1,075.82
• C) $1,082.00
• D) $1,123.01

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Definitions:

Dull Lectures

Lectures that are uninteresting or boring, often perceived as monotonous and lacking in engaging content.

Equilibrium

A situation in a market or model where supply equals demand, and there is no incentive for change.

Lemons

A term used in economics to refer to products of significantly lower quality that cannot be easily distinguished from higher quality products before purchase.

Original Owners

The initial owners of an asset, property, or enterprise before any transfers of ownership.