A Bond with 23 Years to Maturity Is Selling for $991

question 46

Multiple Choice

A bond with 23 years to maturity is selling for $991 and has a yield to maturity of 8.12 percent. If this bond pays its coupon payments semiannually and par value is $1,000, what is the bond's annual coupon rate?

• A) 7.45 percent
• B) 8.03 percent
• C) 9.39 percent
• D) 10.82 percent

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Definitions:

Periods

Distinct spans of time marked by specific events, conditions, or characteristics.

REM Sleep

A phase of sleep characterized by rapid eye movements, increased brain activity, and vivid dreams.

NREM Sleep

Non-Rapid Eye Movement sleep, a restorative sleep phase that includes stages 1 through 3, each deeper than the last.

Cycles

Sequences of events that repeat in a regular and predictable manner, such as the water cycle or menstrual cycle.