A STRIPS Matures in 7 Years Having a Face Value

question 106

Multiple Choice

A STRIPS matures in 7 years having a face value of $5,000 and has a yield-to-maturity of 5.6%. What is the price?

• A) $5,329.15
• B) $3,396.77
• C) $4,619.71
• D) $3,686.04
• E) $3,571.91

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Definitions:

Board of Directors

A group of appointed or elected members who jointly oversee the activities of an organization or corporation.

Insider Trading

The trading of a company's stocks or other securities by individuals with access to non-public, material information about the company.

Shareholder

refers to an individual or entity that owns one or more shares of stock in a corporation, thereby holding a portion of ownership.

Corporation

A legal entity that is separate from its owners, with its own rights and liabilities, allowing it to own property, enter contracts, and be sued.