Consider a Security with a Face Value of $100 000

question 65

Multiple Choice

Consider a security with a face value of $100 000 to be repaid at maturity. The maturity of the security is 3 years. The coupon rate is 9 per cent p.a. and coupon payments are made semi-annually. The current discount rate is 12 per cent p.a. What is the security's price (round your answer to two decimals) ?

• A) $127 000.00
• B) $100 000.00
• C) $76 046.08
• D) $92 624.01

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Definitions:

Ionic Compounds

Chemical compounds composed of ions held together by electrostatic forces termed ionic bonding, typically formed between metals and non-metals.

Transfer of Electrons

A fundamental process in chemistry where electrons move from one atom, ion, or molecule to another, driving various chemical reactions and energy production.

Neutrons

Subatomic particles found in the nucleus of an atom, having no electrical charge and a mass slightly greater than that of protons.

Protons

Positively charged subatomic particles found in the nucleus of an atom, contributing to the atom's mass and defining the element's atomic number.