With a 10% Discount Rate,the Present Value Factor of $1

question 99

Multiple Choice

With a 10% discount rate,the present value factor of $1 received 10 years from now is 0.386.The present value of a $1 annuity factor for 10 years is 6.145.Given these values,the present value of a $1,000 (par) ,10-year corporate bond with a 12% coupon rate is

• A)$6,191.32.
• B)$1,586.00.
• C)$1,123.40.
• D)$1,000.50

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Definitions:

Whole Life Insurance

A type of life insurance policy that offers coverage for the insured's entire lifetime, typically including a savings component.

Liability Insurance

Insurance covering loss caused by the negligence of oneself or one’s employees.

Retirement Income

The funds or revenue sources a person relies on after retiring from active employment or business.

Disability Insurance

A type of insurance that provides income in the event a worker is unable to perform their work and earn money due to a disability.