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Fifteen Years Remain on a 25-Year, 8% Coupon Bond Payable

Question 35

Multiple Choice

Fifteen years remain on a 25-year, 8% coupon bond payable semiannually with a face value of $1,000. The return on comparable bonds is 10%. The formula for determining the market price of the bond today is:


A) PB = $40[FVFA10,25] + $1,000[FVF10,25]
B) PB = $40[PVFA4,30] + $1,000[PVF4,30]
C) PB = $80[PVFA4,15] + $1,000[PVF4,15]
D) PB = $40[PVFA5,30] + $1,000[PVF5,30]

Correct Answer:

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