Assume That You Can Purchase a 15-Year,$1,000 Face Value Bond

question 81

Multiple Choice

Assume that you can purchase a 15-year,$1,000 face value bond which pays interest on a semiannual basis,for $1,324.23.If the market's effective annual required rate of return is 8.16 percent (or 4 percent semi-annually) ,how much interest does this bond pay each year?

• A) $64.81
• B) $56.37
• C) $117.50
• D) $132.19
• E) $126.48

---

Definitions:

Self-Fulfilling Prophesy

A prediction that directly or indirectly causes itself to become true due to the positive feedback between belief and behavior.

Verstehen

A German term used by Max Weber that refers to the understanding of social behavior through empathetic or interpretive means, aiming to grasp the subjective meanings and motivations of social actors.

Organic Solidarity

A concept in sociology where social cohesion comes from the interdependence of individuals in more advanced societies, as described by Émile Durkheim.

Durkheim

A foundational figure in sociology who studied the social basis of human behavior and the role of social institutions in maintaining societal cohesion.