The Price of a Bond Is Equal to the Sum

question 70

Multiple Choice

The price of a bond is equal to the sum of the present values of its future payments.Suppose a certain bond pays $50 one year from today and $1,050 two years from today.What is the price of the bond if the interest rate is 5 percent?

• A)$1,050.00
• B)$1,045.35
• C)$1,000.00
• D)$945.35

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Definitions:

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Classification Categories

The hierarchical system used in biology to organize and categorize all life forms based on shared characteristics and ancestry.

Inclusive

An approach or policy that ensures all people, regardless of their differences, have equal access, opportunities, and rights.

Proper Order

A phrase referring to the correct or suitable arrangement or sequence of elements or actions.