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McCourt Investment Advisors Purchased Newly Issued Bonds on October 1

Question 59

Multiple Choice

McCourt Investment Advisors purchased newly issued bonds on October 1, 2017, paying $108,983. The bonds had a face value of $100,000, maturing on September 30, 2022, and pay interest semiannually on March 31 and September 30. The stated interest rate is 6%. What is the effective interest rate?


A) 4%.
B) 5%.
C) 6%.
D) 7%.

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