A Company Issues a Ten-Year Bond at Par with a Coupon

question 43

Multiple Choice

A company issues a ten-year bond at par with a coupon rate of 6% paid semi-annually.The YTM at the beginning of the third year of the bond (8 years left to maturity) is 7.8%.What is the new price of the bond?

• A)$894.35
• B)$569.65
• C)$722.06
• D)$1,000.00

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Definitions:

Short-term Storage

The part of the memory system that is responsible for temporarily holding information.

Working Memory

The part of short-term memory that is responsible for temporarily holding and processing information necessary for cognitive tasks.

Active Processing

Active Processing is the cognitive act of engaging with information in a meaningful way to ensure its storage, understanding, and retrieval from memory.

Short-term Memory

The capacity for holding a small amount of information in an active, readily available state for a short period of time.