A 10-Year Bond Pays 5% on a Face Value of $1,000

question 49

Multiple Choice

A 10-year bond pays 5% on a face value of $1,000. If similar bonds are currently yielding 10%, what is the market value of the bond? Use annual analysis. Use time value of money tables in Appendix B and Appendix D.

• A) $693.25
• B) $386.00
• C) $3,390.85
• D) $1,386.09

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Definitions:

United States

refers to a country composed of 50 states, a federal district, five major self-governing territories, and various possessions, known for its large size and diverse culture and geography.

Benjamin Rush

Known as a founding father of American psychiatry, he was an 18th-century physician who made significant contributions to the development and understanding of mental illness.

Asylums

Institutions meant for the care of mental illness patients, historically known for their varying standards of treatment.

Mental Illness

A condition that affects a person's thinking, feeling, behavior, or mood, significantly interfering with daily life and functioning.