A Bond with a Par Value of $1,000 and a 10

question 2

Multiple Choice

A bond with a par value of $1,000 and a 10% semi-annual coupon rate has 9 years to maturity.Assuming it is priced to yield 8%, compounded semi-annually, what is the market price of the bond, to the nearest dollar?

• A)$1,074
• B)$1,127
• C)$1,450
• D)$1,510
• E)None of the above

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Definitions:

Trustworthiness

The quality of being reliable, dependable, and worthy of trust based on honesty, integrity, and reliability.

Propinquity

The effect of physical or psychological proximity on the formation of relationships and people's attraction to each other.

Similarity

The state or fact of being alike or having common features, often used to describe how objects, ideas, or individuals share common characteristics.

Reciprocity

A social norm dictating that people should return the help or kindness they receive from others.