Devine Divots Issued a Bond a Few Years Ago That

question 75

Multiple Choice

Devine Divots issued a bond a few years ago that has a face value equal to $1,000 and pays investors $30 interest every six months.The bond has eight years remaining until maturity.If you require a 7 percent rate of return to invest in this bond, what is the maximum price you should be willing to pay to purchase the bond?

• A)$761.15
• B)$939.53
• C)$940.29
• D)$965.63
• E)$1,062.81

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Definitions:

Branches

Divisions or offshoots of a larger organization, company, or government that operate semi-autonomously, often with a specific local or functional focus.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something, or the effect itself.

Spending Power

The financial ability or capacity of an entity (individual, government, or organization) to make purchases or invest, influencing economic activity.

Enumerated Power

Powers that are specifically listed in the Constitution that define the authority of a particular branch of government.