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Stephanie Would Like to Purchase a Bond That Has a Par

Question 44

Multiple Choice

Stephanie would like to purchase a bond that has a par value of $1,000, pays $100 at the end of each year in coupon payments, and has three years remaining until maturity. If the prevailing annualized yield on other bonds with similar characteristics is 12 percent, how much will Stephanie pay for the bond?


A) $1,000.00
B) $951.97
C) $856.80
D) None of these are correct.

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