A Bond Will Pay $70 of Interest at the End

question 41

Multiple Choice

A bond will pay $70 of interest at the end of each of the next three years, plus $1,000 at the end of year three. If its present market price is $1,040, its yield-to-maturity is

• A) 5.5%.
• B) 4.9%.
• C) 6.4%.
• D) 6.8%.

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