Your friend Kimberly is starting a new bakery in Chicago,Illinois,that specializes in gluten-free items.Because her business is new and risky,she is unable to obtain a loan from the local bank.You agree to pay a price of $8,000 for a one-year bond from Kimberly,and you will receive $9,000 in return on June 21,2014.
a.What is the par value of this bond?
b.What is the price of the bond?
c.What is the interest rate of the bond?
d.What is the importance of June 21, 2014?
Correct Answer:
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b.$8,000
c.12.5%
d.Ju...
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