A bond that pays annual interest (or coupons) and a face value at maturity will fetch a price today that is equal to the:

Question

Quizplus · Accepted Answer

A bond that pays annual interest (or coupons) and a face value at maturity is a type of fixed-income security with known cash flows. To calculate its price today, we need to discount its future cash flows back to the present using a discount rate that reflects the time value of money and the risk associated with the bond. Therefore, the correct option is the present value of its annual coupons and face value, which considers the time value of money and the risk involved in the investment.

A Bond That Pays Annual Interest (Or Coupons) and a Face