A 2-Year T-Note Has a Face Value of $1,000 and Pays

question 69

Multiple Choice

A 2-year T-Note has a face value of $1,000 and pays annual coupons of $75.The next coupon is due in one year.What is the correct price for the coupon bond today? Use the term structure of interest rates shown below to answer the question.

• A) $982
• B) $992
• C) $1,002
• D) $1,012
• E) $1,022

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Definitions:

Too Little Work

A situation in which there is insufficient work available, leading to boredom and underutilization of skills.

Addressing Problems

The act of identifying, analyzing, and finding solutions for issues or challenges within a specific context.

Decision Making

The cognitive process of selecting a course of action from multiple alternatives.

Group Expectations

The set of beliefs or standards that members of a group hold regarding what behaviors or performances are desirable or acceptable within the group.