A Bond with a Face Value of $5,000 Can Be

question 8

Multiple Choice

A bond with a face value of $5,000 can be exchanged for 70 shares of stock.The bond has a coupon rate of 6.5 percent which equals the market rate of interest.Assume the option premium is $50.What is the market value of the bond if the stock is selling for $68.90 a share and the bond matures in exactly one year?

• A)$4,744.84
• B)$4,873.00
• C)$5,000.00
• D)$4,940.00
• E)$5,050.00

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Definitions:

Directly Address

To confront or deal with a matter openly and straightforwardly.

Different Time

A period distinct from the present, often implying a change in circumstances, environments, or conditions.

Confidentiality

The obligation to keep personal, medical, or official information secret and not to disclose it to unauthorized individuals.

Surveys

Research methods that collect data from a specific population to study opinions, behaviors, or characteristics, typically through questionnaires or interviews.