Kevin Rogers is interested in buying a five-year bond that pays a coupon of 10 percent on a semiannual basis. The current market rate for similar bonds is 8.8 percent. What should be the current price of this bond? (Do not round intermediate computations. Round your final answer to the nearest dollar.)

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The correct answer is A.The bond's price can be calculated using the following formula:Bond Price = (C * (1 - (1 + r)^-n)) / r + (FV / (1 + r)^n)where:C = coupon paymentr = market raten = number of periodsFV = face valueIn this case, the coupon payment is $50 (10% of $1,000), the market rate is 8.8%, the number of periods is 10 (5 years * 2 semiannual periods per year), and the face value is $1,000.Plugging these values into the formula, we get:Bond Price = (50 * (1 - (1 + 0.088)^-10)) / 0.088 + (1000 / (1 + 0.088)^10)= (50 * (1 - 0.4632)) / 0.088 + (1000 / 1.9671)= (50 * 0.5368) / 0.088 + 513.65= 26.84 / 0.088 + 513.65= 304.82 + 513.65= $1,048.47Rounding to the nearest dollar, the current price of the bond should be $1,048.

Kevin Rogers Is Interested in Buying a Five-Year Bond That