A 20-Year Bond with a $1,000 Face Value Was Issued

question 67

Multiple Choice

A 20-year bond with a $1,000 face value was issued with a yield to maturity of 4.3% and pays coupons semi-annually. After ten years, the yield to maturity is still 4.3% and the clean price of the bond is $959.71. After three more months go by, what would you expect the dirty price to be?

• A) $978.71
• B) $969.21
• C) $997.71
• D) Cannot be determined from information given.

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Definitions:

College Degree

A certification awarded by colleges or universities to signify that a student has completed a specified course of study, typically representing a higher level of education and expertise.

Stock

In finance, stock represents ownership shares in a company, allowing investors to claim on the company's assets and earnings proportionate to the amount of stock they own.

Economy

A system of production, distribution, and consumption of goods and services among a group of people.

Opportunity Cost

The detriment of not pursuing the second-top option when engaging in decision-making.