Assume That You Own a Hundred $1,000 Par Value Bonds,with

question 96

Multiple Choice

Assume that you own a hundred $1,000 par value bonds,with a total face value of $100,000.These bonds have a 4 percent coupon,pay interest semiannually,and have 5 years remaining until they mature.New bonds with the same risk and maturity provide yields to maturity of 14 percent.You are considering selling your bonds and depositing the proceeds in a savings account which pays interest at a rate of 6 percent,annual compounding.If you do make the transaction,you will liquidate the savings account by making 5 equal withdrawals,the first coming 1 year from now.What will be the amount of each annual withdrawal?

• A) $12,940
• B) $15,403
• C) $24,860
• D) $29,425
• E) $64,880

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Definitions:

Elderly People

Elderly people refers to individuals who are significantly beyond the average age of retirement, often considered to be those aged 65 years and older.

Adequate Funds

Sufficient monetary resources required to cover expenses, support operations, or fulfill a specific purpose or project.

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Research approaches that focus on understanding aspects of human behavior and the reasons that govern such behavior through observational and interpretational techniques.

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