A Three-Year Bond with a Principal Amount of $5,000,a 3

question 130

Multiple Choice

A three-year bond with a principal amount of $5,000,a 3% coupon rate paid annually,one year from maturity will sell for what price (rounded to the nearest dollar) in the bond market if interest rates are 5%?

• A) $4,762.
• B) $4,905.
• C) $5,000.
• D) $5,150.
• E) $5,408.