A 30-Year, $10,000 Strip Bond Was Originally Issued at 5

question 165

Multiple Choice

A 30-year, $10,000 strip bond was originally issued at 5% compounded semi-annually. Ten years later the original purchaser sold the bond at the prevailing market rate at that time which was 7% compounded semi-annually. How much profit did the original purchaser earn over the 10 years?

• A) $(1,198) Loss
• B) $253 Profit
• C) $806 Profit
• D) $1,451 Profit
• E) $2,000 Profit

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