What Is the Purchase Price of a Bond That Is

question 57

Multiple Choice

What is the purchase price of a bond that is issued on May 1, 2002 for 22 years at a coupon rate of 9.4% compounded semi-annually? The purchase date of the bond is May 11, 2007 and the yield rate is 8.5% compounded semi-annually. The bond has a face value of $5000 and is redeemable at par.

• A) $4513.30
• B) $5413.30
• C) $5431.30
• D) $4531.30
• E) $4533.30

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Definitions:

Agency Relationship

A legal and principal relationship formed between two parties, where one party, the agent, is authorized to act on behalf of another, the principal, in business dealings.

Negligence Alleging

The act of claiming or asserting that a party failed to meet its duty of care, leading to harm or damage.

Independent Contractor

An individual or business that provides goods or services to another entity under terms specified in a contract or within a verbal agreement, not considered an employee.

Independent Contractor

An individual in business for themselves, who provides services to others under terms specified in a contract or agreement.