A Bond Will Pay $80 in Interest at the End

question 62

Multiple Choice

A bond will pay $80 in interest at the end of each of the next three years, plus $1,000 at the end of the third year. If it has a present market price of $950, its yield-to-maturity is

• A) 8.5%.
• B) 9.4%.
• C) 10%.
• D) 10.5%.

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Definitions:

Orchids

A diverse and widespread family of flowering plants with complex, often colorful and fragrant flowers.

Opossums

Marsupials native to the Americas known for their ability to play dead as a defensive mechanism and their omnivorous diet.

Clear-cutting

A forestry or logging practice where most or all trees in an area are uniformly cut down.

Old-growth Characteristics

Features typical of ancient forests, such as large trees, significant amounts of dead wood, and high biodiversity.