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Your Client Has Been Offered a 5-Year, $1,000 Par Value

Question 77

Multiple Choice

Your client has been offered a 5-year, $1,000 par value bond with a 10 percent coupon. Interest on this bond is paid quarterly. If your client is to earn a nominal rate of return of 12 percent, compounded quarterly, how much should she pay for the bond?


A) $ 800
B) $ 926
C) $1,025
D) $1,216
E) $ 981

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