Exhibit 12-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 33

Multiple Choice

Exhibit 12-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Talmart Corporation bonds have a $1,000 face value and will mature in 4 years. The bonds have a 7% coupon rate. Interest is paid annually and the required rate of return is 6% for these bonds.
-Refer to Exhibit 12-2. 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:

John Maynard Keynes

A British economic thinker whose insights led to significant shifts in macroeconomic practices and the economic approaches of governments.

Economy

The organized system of human activity involved in the production, consumption, and trading of goods and services.

Say's Law

An economic principle that suggests supply creates its own demand, meaning production of goods and services generates the purchasing power needed to buy those goods and services.

Supply

The total amount of a product or service that is available for purchase at any given price in a given market.