Consider a Security with a Face Value of $100 000

question 1

Multiple Choice

Consider a security with a face value of $100 000, which is to be repaid at maturity. The security pays an annual coupon of 8 per cent and has a maturity of three years. The current discount rate is 10 per cent. What is the security's current price (round to two decimals) ?

• A) $124 000
• B) $95 026.30
• C) $19 894.82
• D) $100 000

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Definitions:

Visual Cue

A signal or marker, often visual, that guides behavior, influences perception, or provides direction.

Written Reports

Documents that present and analyze information or findings, usually in a structured format, for a specific audience and purpose.

Punctuation

Punctuation consists of symbols used in written language to clarify meaning by indicating pauses, joining or separating sentences and phrases, and emphasizing certain points.

Delivery Rate

The speed or frequency with which something is delivered or supplied, often used in the context of goods, services, or information.