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Shana Norris Wants to Buy Five-Year Zero Coupon Bonds with a Face

Question 3

Multiple Choice

Shana Norris wants to buy five-year zero coupon bonds with a face value of $1,000. Her opportunity cost is 8.5 percent. Assuming annual compounding, what would be the current market price of these bonds? (Round your answer to the nearest dollar.)


A) $1,023
B) $665
C) $890
D) $1,113

Correct Answer:

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