A municipal bond with a face value of $10,000 and bond interest rate of 8% per year payable quarterly has a maturity date of 30 years from the date of issue. If the bond was issued 10 years ago and an investor wishes to make a rate of return of at least 12% per year, compounded quarterly, the amount the investor should pay for the bond is approximately i) ii) iii) iv) $6,000 $7,500 $6,980 $8,000
A municipal bond with a face value of $10,000 and bond interest rate of 8% per year payable quarterly has a maturity date of 30 years from the date of issue. If the bond was issued 10 years ago and an investor wishes to make a rate of return of at least 12% per year, compounded quarterly, the amount the investor should pay for the bond is approximately i) ii) iii) iv) $6,000 $7,500 $6,980 $8,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:10) A municipal bond with a face value of $10,000 and bond interest rate of 8% per year
payable quarterly has a maturity date of 30 years from the date of issue. If the bond was
issued 10 years ago and an investor wishes to make a rate of return of at least 12% per
year, compounded quarterly, the amount the investor should pay for the bond is
approximately
i)
ii)
iii)
iv)
$6,000
$7,500
$6,980
$8,000
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