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If a Bond Offers $400 in Interest Payments at the End

Question 18

Multiple Choice

If a bond offers $400 in interest payments at the end of each of next 3 years and a repayment of $2,000 also at the end of the 3 years and the current discount rate is 5 percent, what is the market price for the bond?


A) $2,256
B) $2,817
C) $3,589
D) $2,593

Correct Answer:

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