USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 77

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Talmart Corporation bonds have a $1,000 face value and will mature in four years. The bonds have a 7 percent coupon rate. Interest is paid annually, and the required rate of return is 6 percent for these bonds.
-Refer to Exhibit 13.2. What is the Modified duration of the Talmart corporate bonds?

• A) 3.43
• B) 3.64
• C) 3.76
• D) 3.85
• E) 4.11

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Definitions:

Price

The amount of money required to purchase a good or service.

Positive Externality

A benefit that is enjoyed by a third-party as a result of an economic transaction, without them necessarily being involved in the transaction.

Marginal Social Benefit

Sum of the marginal private benefit plus the marginal external benefit.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded.