An Investor Purchases a 20-Year, $1,000 Par Value Bond That

Multiple Choice

An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is five percent, what is the current market value of the bond?

A) $ 858.
B) $1,686 .
C) $1,000.
D) $ 893.*PVA of $1: n=40; i=5% **PV of $1: n=40; i=5%