Calculate the Price at the Beginning of Year 1 of a 10

question 34

Multiple Choice

Calculate the price at the beginning of year 1 of a 10% annual coupon bond with face value $1,000 and 5 years to maturity.

• A)$1,105
• B)$1,132
• C)$1,179
• D)$1,150
• E)$1,119

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Definitions:

Self-Serving Bias

The common tendency to attribute one’s successes to personal characteristics and failures to external factors.

Shock Machine

Often associated with psychological experiments, it refers to a device used to deliver an electric shock to a subject, typically used in studies on obedience, learning, and punishment.

Stanley Milgram

A psychologist best known for his research on obedience to authority, which revealed how people are willing to follow orders even when it results in harming others.

Obedience

Compliance with an order, request, or law, or submission to another's authority.