A Bond with a Face Value of $1,000 Has a Current

question 114

Multiple Choice

A bond with a face value of $1,000 has a current yield of 6.5 percent and a coupon rate of 7 percent. What is the price of the bond?

• A) $1,054.80
• B) $612.73
• C) $1,076.92
• D) $1,126.40
• E) $538.46

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Definitions:

Outputs Contract

An agreement in which the seller agrees to sell all of the production at its facility to a buyer, who agrees to purchase it, often used in industrial or farming contexts.

Oral Modify

The act of making changes or amendments to an existing contract through spoken agreement, as opposed to written modifications.

Debt Settlement

A negotiation process where a debtor and creditor agree on a reduced balance that will be considered as payment in full.

Uncertain Debt

A debt whose existence or amount is not clear or determined.