Which of the Following Amounts Is Closest to the Value

question 51

Multiple Choice

Which of the following amounts is closest to the value of a bond that pays $55 semiannually and has an effective semiannual interest rate of 5%? The face value is $1,000 and the bond matures in 3 years. There are exactly six months before the first interest payment.

• A) $888
• B) $1,000
• C) $1,014
• D) $1,025
• E) $1,055

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