The next questions refer to the following.
A five-year bond is to be issued with a face value of $1,000 and a coupon rate of 5%.
-After two years have elapsed,the bond's price should be

Question

Quizplus · Accepted Answer

The bond's price after two years can be calculated using the present value of its future cash flows, which include the remaining three years of coupon payments and the face value repayment at maturity. The bond's price is calculated as the present value of these cash flows, discounted at the bond's yield to maturity. Without the yield to maturity, we cannot precisely calculate the bond's price, but option A) $898.75 is the correct choice provided, assuming it was calculated based on a given discount rate that reflects the bond's yield to maturity or the prevailing interest rates at the time.

The Next Questions Refer to the Following