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Grossnickle Corporation Issued 20-Year,noncallable,7

Question 8

Multiple Choice

Grossnickle Corporation issued 20-year,noncallable,7.5% annual coupon bonds at their par value of $1,000 one year ago.Today,the market interest rate on these bonds is 5.5%.What is the current price of the bonds,given that they now have 19 years to maturity?


A) $1,113.48
B) $1,142.03
C) $1,171.32
D) $1,201.35
E) $1,232.15

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