Which of the Following Amounts Is Closest to the Present

question 63

Multiple Choice

Which of the following amounts is closest to the present value of a bond with coupon payment of $80 and a face value of $1,000? Interest payments are made at the end of each of 2 years, and the bond matures in 2 years. The spot interest rate for the first year is 10%, and the spot interest rate for the second year is 12%.

• A) $910
• B) $934
• C) $949
• D) $1,000

Describe factors affecting bond interest rates including the issuer's financial condition and term length.

Understand the relationship between risk and return in investment choices.

Analyze the impact of government fiscal policies on interest rates and investment.

Describe the market mechanics and participants in the stock and bond markets.

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Definitions:

Society

A large group of individuals living together in a more or less ordered community with shared laws, traditions, and values.

Gendered Institutions

The total pattern of gender relations that structure social institutions, including the stereotypical expectations, interpersonal relationships, and the different placement of men and women that are found in institutions.

Sexist Ways

Practices, attitudes, or behaviors that discriminate or devalue individuals based on their gender, often perpetuating stereotypes and undermining equality.

Sexism

Prejudice, stereotyping, or discrimination, typically against women, on the basis of sex.