A few years ago, you paid $10,000 to buy a corporate bond with a face value (maturity value) of $10,000 that has a coupon rate of 4% payable semi-annually (pays $200 every 6 months). If the bond matures in 10 years, how much is it worth today if the interest rate for similar bonds is 6% compounded semi-annually? A) $7002.52 B) $5,734.90 C) $8,468.28 D) $2,561.26 E) $8,512.25

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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A few years ago, you paid $10,000 to buy a corporate bond with a face value
(maturity value) of $10,000 that has a coupon rate of 4% payable semi-annually (pays
$200 every 6 months).
If the bond matures in 10 years, how much is it worth today if the interest rate for
similar bonds is 6% compounded semi-annually?
A) $7002.52
B) $5,734.90
C) $8,468.28
D) $2,561.26
E) $8,512.25
Transcribed Image Text:A few years ago, you paid $10,000 to buy a corporate bond with a face value (maturity value) of $10,000 that has a coupon rate of 4% payable semi-annually (pays $200 every 6 months). If the bond matures in 10 years, how much is it worth today if the interest rate for similar bonds is 6% compounded semi-annually? A) $7002.52 B) $5,734.90 C) $8,468.28 D) $2,561.26 E) $8,512.25
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