If You Own a $1,000 Face Value Bond with One

question 128

Multiple Choice

If you own a $1,000 face value bond with one year remaining to maturity and a five percent coupon rate and new bonds are paying 12 percent, what is the most you can get for your old bond?

• A)$1,120
• B)$1,000
• C)$937.50
• D)impossible to determine without additional information

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