Use the Information for the Question(s) Below

question 11

Multiple Choice

Use the information for the question(s) below.
Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's college education. Currently college tuition, books, fees, and other costs average $12,500 per year. On average, tuition and other costs have historically increased at a rate of 4% per year.
-A Canadian company issues an 8-year term bond with face value of $1,000 and 6% coupon rate.If the market prevailing effective rate of interest is 5.75%,what is the price an investor will have to pay?

• A) $1,015.85
• B) $1,200.00
• C) $1,150.00
• D) $1,215.00

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Definitions:

Latent Learning

A form of learning that occurs without immediate reinforcement or noticeable behavior change, becoming apparent when there's a reason to demonstrate it.

Exact Route

A specific path or direction taken to reach a destination without deviation.

Driven

Being highly motivated or determined to achieve certain goals or outcomes.

School

An institution for educating children and young people in various subjects, developing skills and knowledge for personal growth and future employment.