What Is the Market Value of a Bond That Has

question 30

Multiple Choice

What is the market value of a bond that has a required rate of return of 10% p.a.and pays $50 p.a.with only two years remaining to maturity,if the redemption value is $1000 and the initial market value of the bond was $850 when it was first issued eight years ago?

• A)$571.80
• B)$1421.80
• C)$826.45
• D)$913.22

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Definitions:

Incapacity

Lacking the ability, power, or legal qualification to act, make decisions, or give consent.

Unenforceable Agreement

A contract or agreement that, due to certain defects or legal deficiencies, cannot be legally enforced or compelled by a court.

Compensatory Damages

Financial compensation awarded to a plaintiff to redress the loss or injury that has been suffered.

Punitive Damages

Monetary compensation awarded to an injured party that goes beyond what is necessary to compensate for losses and is intended to punish the wrongdoer.