A Bond Has a $1000 Face Value,ten Years to Maturity,and

question 64

Multiple Choice

A bond has a $1000 face value,ten years to maturity,and 7% semiannual coupon payments.What would be the expected difference in this bond's price immediately before and immediately after the next coupon payment?

• A)$18
• B)$35
• C)$70
• D)$84

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Definitions:

Marketable Securities

Financial instruments that can be easily converted into cash, often used for short-term investments by companies.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations, calculated as current assets divided by current liabilities.

Current Assets

Assets that are expected to be converted into cash, sold or consumed within a year or within the operating cycle of a business, such as cash, marketable securities, inventory, and accounts receivable.

Net Income

The total profit of a company after all expenses, including taxes and operational expenses, have been subtracted from total revenue.