A Five-Year Bond with a $1000 Face Value Has a Yield

question 41

Multiple Choice

A five-year bond with a $1000 face value has a yield to maturity is 5.5% and its coupon rate is 6.0% paid annually.The dirty price of this bond exactly 6 months after its second coupon payment is closest to:

• A)$684.67
• B)$983.93
• C)$1005.87
• D)$1043.49

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Definitions:

Combining Form

A word root with a vowel at the end that is used to construct medical and scientific terms.

Suffix

A letter or group of letters added at the end of a word to modify its meaning or change it into a different word form, such as a noun to an adjective.

Consonant

A basic speech sound in which the breath is at least partially obstructed, and which can be combined with a vowel to form a syllable.

Arthritis

A condition characterized by inflammation of one or more joints, leading to pain and stiffness that can worsen with age.