One Year Before Maturity, the Price of a Bond with a Principal

question 130

Multiple Choice

One year before maturity, the price of a bond with a principal amount of $1,000 and a coupon rate of 5% paid annually fell to $981.The one-year interest rate must be:

• A)8.5%.
• B)7.0%.
• C)5.0%.
• D)1.9%.

---

Definitions:

Proto-Oncogenes

Normal genes that can become oncogenes if mutated; they usually control normal cell growth and division.

Oncogenes

Genes that have the potential to cause cancer by encouraging normal cells to grow uncontrollably.

Homeobox-Like Genes

Genes that contain a homeobox DNA sequence coding for proteins that bind DNA, playing crucial roles in regulating the development of anatomical structures in organisms.

E. Coli

A common bacterium found in the intestines of animals, including humans, and is sometimes associated with food poisoning.