A Bond Will Pay $75 in Interest at the End

question 32

Multiple Choice

A bond will pay $75 in interest at the end of each of the next four years plus the $1,000 principal at the end of four years. If the yield-to-maturity should be 6%, the bond's intrinsic value is

• A) treasury issue rates.
• B) the investor's personal return requirement.
• C) S and P's 500 dividend yield rates.
• D) spot rates.

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