Consider a Security with a Face Value of $100 000

question 9

Multiple Choice

Consider a security with a face value of $100 000, which is to be repaid at maturity.The security pays an annual coupon of 8% and has a maturity of three years.The current discount rate is 10%.What is the security's current price (round to two decimals) ?

• A)$124,000
• B)$95,026.30
• C)$19,894.82
• D)$100,000

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Definitions:

Cultural Assimilation

The process in which individuals from a minority group gradually adopt the customs, attitudes, and cultural practices of the dominant societal group.

Operational

Relates to the daily functions and activities required for the running of a business or execution of a process, focusing on efficiency and effectiveness.

Financial

Pertaining to the management of money, assets, or investments by individuals, organizations, or governments.

Strategic

Pertaining to the identification of long-term or overall aims and interests and the means of achieving them through careful planning and allocation of resources.