A 7 Percent Coupon Bond Has a Face Value of $1,000

question 85

Multiple Choice

A 7 percent coupon bond has a face value of $1,000 and pays interest annually.The current yield is 6.8 percent.What is the current price of this bond?

• A) $971.43
• B) $978.41
• C) $1,068.00
• D) $1,029.41
• E) $1,104.00

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Definitions:

Economic Analysis

A methodical strategy for deciding the best way to allocate limited resources, which includes evaluating multiple options to reach a particular goal within established assumptions and limitations.

Marginal Changes

Marginal changes describe small adjustments to a variable's quantity or level, analyzing the effects of these adjustments on an overall system.

Status Quo

The existing state or condition of affairs, often used in the context of maintaining current circumstances without change.

Entrepreneurship

The act of creating, organizing, and running a new business venture to take advantage of market opportunities, often involving risk and innovation.