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Consider a Bond That Promises to Make Coupon Payments of $100

Question 12

Multiple Choice

Consider a bond that promises to make coupon payments of $100 each year for three years (beginning in one year's time) and also repays the face value of $2000 at the end of the third year.If the market interest rate is 4%,what is the present value of this bond?


A) $288.45
B) $1866.67
C) $1941.57
D) $1966.39
E) $2055.50

Correct Answer:

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