The British Government Has a Consol Bond Outstanding That Pays

question 68

Multiple Choice

The British government has a consol bond outstanding that pays ₤100 in interest each year.Assuming that the current interest rate in Great Britain is 5% and that you will receive your first interest payment one year from now,then the value of the consol bond is closest to:

• A)₤1000.
• B)₤1100.
• C)₤2100.
• D)₤2000.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and a potential say in company decisions.

Cash

Liquid currency or assets that can be immediately used to make transactions or settle debts.

Day-to-day Expenses

Regular and routine expenses that are necessary for the daily operations of an individual or organization, such as groceries or office supplies.

Major Purpose

The primary reason or objective behind an action, strategy, or existence of an entity or project.