Multiple Choice
Which of the following amounts is closest to the present value of a bond with coupon payment of $80 and a face value of $1,000? Interest payments are made at the end of each of 2 years, and the bond matures in 2 years. The spot interest rate for the first year is 10%, and the spot interest rate for the second year is 12%.
A) $910
B) $934
C) $949
D) $1,000
Correct Answer:
Verified
Correct Answer:
Verified
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