A Bond Is Currently Selling for $910 and Has a Remaining

question 42

Multiple Choice

A bond is currently selling for $910 and has a remaining life of three years. It makes an annual coupon payment of $60 and has a par of $1,000. If the yield to maturity is 9%, what is the net present value of the bond?

• A) $24.06
• B) $14.06
• C) $9.83
• D) $18.57

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Definitions:

Object Permanence

The understanding that objects continue to exist even when they cannot be observed or heard.

Egocentric Thought

A mode of thinking, common in early childhood, where an individual perceives the world solely from their own perspective, often failing to recognize others' viewpoints.

Sing

The act of producing musical sounds with the voice, often with a tune.

Assimilation

The process by which an individual or group adopts the cultural traits or social patterns of another group, becoming integrated into a community or society.