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Consider a Security with a Face Value of $100 000

Question 1

Multiple Choice

Consider a security with a face value of $100 000, which is to be repaid at maturity. The security pays an annual coupon of 8 per cent and has a maturity of three years. The current discount rate is 10 per cent. What is the security's current price (round to two decimals) ?


A) $124 000
B) $95 026.30
C) $19 894.82
D) $100 000

Correct Answer:

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