• 2022-06-07
    If the annual market discount rate is 6%, the value of a three-year bond that has a 7% coupon rate, has a maturity (par) value of $1,000, and pays interest annually is closest to:
    A: $1,026.73.
    B: $1,049.17.
    C: $973.76.
  • A

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    • 0

      A bond with two years remaining until maturity offers a 3% coupon rate with interest paid annually. At a market discount rate of 4%, the price of this bond per 100 of par value is closest to: A: 95.34. B: 98.00. C: 98.11.

    • 1

      A<br/>coupon bond that pays interest semi-annually has a par value of<br/>$1,000, matures in seven years, and has a yield to maturity of 11%.<br/>The intrinsic value of the bond today will be ________ if the<br/>coupon rate is 8.8%. A: $922.78 B: $894.51 C: $1,075.80 D: $1,077.20 E: None<br/>of the options are correct.

    • 2

      Consider the following two bonds that pay interest annually: Bond Coupon Rate Time-to-Maturity A 5% 2 years B 3% 2 years At a market discount rate of 4%, the price difference between BondBper 100 of par value is closest to: A: 3.70. B: 3.77. C: 4.00.

    • 3

      A zero-coupon bond matures in 15 years. At a market discount rate of 4.5% per year and assuming annual compounding, the price of the bond per 100 of par value is closest to: A: 51.30. B: 51.67. C: 71.62.

    • 4

      The coupon rate of bond is the interest rate specified in the bond, which is equal to the ratio of the annual interest over the value of bond.