If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$75 / (1 + .04) 6] + [$2,500 / (1 + .04) 6]," which of the following is correct?
A) The face value is $2,500,the coupon is $75,and the coupon will mature in 4 years.
B) The face value is $75,the interest rate you need is 1.04 percent,and the coupon will mature in 6 years.
C) The face value is $2,500,the interest rate you need is 6 percent,and the coupon will mature in 4 years.
D) The coupon is $75,the interest rate you need is 4 percent,and the coupon will mature in 6 years.
Correct Answer:
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