What Is the Current Price of a Financial Security That

question 42

Multiple Choice

What is the current price of a financial security that pays a fixed coupon of 10.2% per annum per $100 face value,compounding half-yearly and maturing in four years,when current yields in the market are 8.6% per annum?

• A) $103.9575
• B) $70.3185
• C) $103.887
• D) $132.8295

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Definitions:

Dependent

Relying on someone or something else for support, care, or sustenance.

Limit Setting

The process of establishing clear boundaries and rules to guide acceptable behavior and protect the well-being of individuals and groups.

Provocative

Causing a strong reaction, often deliberately, by presenting challenging or stimulating ideas, situations, or information.

Hypervigilant

An enhanced state of sensory sensitivity accompanied by an exaggerated intensity of behaviors whose purpose is to detect threats.