A Bond with a 9-Year Duration Is Worth $1,080

question 73

Multiple Choice

A bond with a 9-year duration is worth $1,080.00 and its yield to maturity is 8%.If the yield to maturity falls to 7.84%,you would predict that the new value of the bond will be _________.

• A) $1,035
• B) $1,036
• C) $1,094
• D) $1,124

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Definitions:

Footnotes

Additional information provided at the bottom of financial statements to offer more details about an entity's financial status or policies.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, essentially diluting the share price.

Common Stock

Equity securities that represent ownership in a corporation, providing voting rights and a share in the company's profits via dividends.