Ralph Purchases a Newly-Issued,two-Year Government Bond with a Principal Amount

question 133

Multiple Choice

Ralph purchases a newly-issued,two-year government bond with a principal amount of $10,000 and a coupon rate of 7% paid annually.One year before the bonds matures (and after receiving the coupon payment for the first year) ,Ralph sells the bond in the bond market.What price (rounded to the nearest dollar) will Ralph receive for his bond if the prevailing interest rate is 8%?

• A) $9,259.
• B) $9,907.
• C) $10,000.
• D) $10,700.
• E) $11,556.

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Definitions:

Need

A requirement or necessity for survival and well-being.

McClelland's

A theory of motivation that highlights the importance of three primary needs: the need for achievement, the need for affiliation, and the need for power.

McClelland's

Refers to David McClelland's theory of needs, which identifies three primary motivational drivers: the need for achievement, the need for affiliation, and the need for power.

Short-Term Goals

Objectives set to be achieved in a brief period, guiding immediate actions and strategies.