A Bond with a Par Value of $1,000 and a 13

question 23

Multiple Choice

A bond with a par value of $1,000 and a 13% semi-annual coupon rate has 20 years to maturity.Assuming it is priced to yield 10%, compounded semi-annually, what is the market value of the bond, to the nearest dollar?

• A)$1,187
• B)$1,107
• C)$1,257
• D)$2,373
• E)None of the above

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Definitions:

Investment

The procedure or operation of assigning financial assets with the intention of achieving a revenue or profit.

Investment

The action or process of investing money for profit or material result.

New Capital

Funds or assets invested in a company or economy to generate growth and new business opportunities.

Capital Investment

Funds invested in a firm or enterprise for the purposes of furthering its business objectives, including the purchase of physical equipments, property, or technology.