How much is a bond that pays $80 in coupon payments for 4 years and $1,000 at the end of the fourth year worth if the interest rate is 6%?
A) $855.46 B) $1,045.56 C) $1,069.30 D) $1,140.00
C
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Every spring, motorists do more driving than during the winter months. Every spring, the price of gasoline increases and the motorists buy more gasoline. This experience suggests that the
A) "law of supply" does not always hold for necessities like gasoline. B) "law of demand" does not always hold for necessities like gasoline. C) laws of supply and demand are both contradicted for gasoline, though only during the spring driving season. D) None of the above answers are correct.
Economic theory asserts that an optimal decision is one that:
a. ignores implicit costs. b. ignores explicit costs. c. ignores the time frame in which costs and benefits are incurred. d. has chosen to undertake all of those activities that add to net gains.