Consider a Security with a Face Value of $100 000

question 32

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 duration (round to two decimals) ?

• A) 2.78 years
• B) 3 years
• C) 0.36 years
• D) 1.94 years

Evaluate assets and liabilities to prepare for liquidation or reorganization decisions.

Distinguish between asset, liability, equity, revenue, and expense accounts.

Recognize the role and structure of the chart of accounts.

Identify the significance and types of source documents in accounting.

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