You are thinking of purchasing a 5-year bond, with a face value of $8,000 . on the secondary bond market. The bond was issued three years ago, so it will mature two years from today. If the interest rate is 10 percent (0.10) per year, what is the value of the bond?
a. $6,611.57
b. $8,000.00
c. $4,967.37
d. $6,010.52
e. $7,272.73
A
You might also like to view...
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
The most notable surfaced road of the 19th century, ___________, was built using federal government funds
a. the Cumberland Road b. the Wilderness Road c. the Natchez Trail d. the Forbes Road
If the demand for steak increases as income increases, then steak is a(n):
A. normal good. B. substitute good. C. inferior good. D. complementary good.
Professor Jeremy Siegel, of the University of Pennsylvania, did research showing that:
A. bonds really are less risky to hold over the long term. B. owning stocks over the long run produces returns below the risk-free return. C. the return on the S&P 500 for a 25-year period often produces returns below zero. D. if an investor owns stocks for a very short time the risk is greater than if the stocks are held for a long time.