A $100 000 Face Value Strip Bond Has 6 Years

question 135

Multiple Choice

A $100 000 face value strip bond has 6 years remaining until maturity. If the current market return rate is 4% compounded semi-annually, what is the fair market value of the strip bond?

• A) $78 849
• B) $79 031
• C) $88 797
• D) $100 000
• E) $126 824

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