What Is the Value of a Bond That Matures in 17

question 89

Multiple Choice

What is the value of a bond that matures in 17 years,makes an annual coupon payment of $50,and has a par value of $1,000? Assume a required rate of return of 6%.

• A) $822.90
• B) $856.29
• C) $895.23
• D) $904.87

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Definitions:

Confession of Judgment

An agreement where a debtor allows a creditor to obtain a judgment against them without a trial.

Power of Attorney

A legal document authorizing one person to act on behalf of another in legal or financial matters.

Commerce Treaty

An international agreement between countries that regulates aspects of trade among them, possibly including tariffs, import and export quotas, and other trade restrictions.

Negotiable Instrument

A written and signed promise or order to pay a specific sum of money that can be transferred by endorsement or delivery.