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A Bond with $40 Coupons Every 6 Months Is Purchased

Question 36

Multiple Choice

A bond with $40 coupons every 6 months is purchased at a discount to yield j2 = 8%.If the absolute value of the write-up for the first year is $10,what is the purchase price of the bond?


A) $750
B) $1250
C) $1500
D) $2500

Correct Answer:

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