A $1000 Bond with Semi-Annual Coupons Is Redeemable for $960

question 33

Multiple Choice

A $1000 bond with semi-annual coupons is redeemable for $960 in 6 years.The write-down (book value adjustment) in the first coupon period is $1.79.What is the price of the bond in order to yield j₂ = 10%?

• A)$931.51
• B)$971.51
• C)$988.49
• D)$1028.49

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Definitions:

Law of Reason

A philosophical idea that moral and legal norms should be grounded in rational thought and logic.

Categorical Imperative

A fundamental principle in the ethical philosophy of Immanuel Kant that requires that individuals act in a manner in which they wish their actions to become universal laws.

Ethical Imperative

A strong moral obligation or duty which compels someone to act in a certain way based on ethical considerations.

Rational Agents

Entities capable of making decisions based on reasoning, often in the context of economic models or artificial intelligence.