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A $4000 Accumulation Bond (Compound Interest Bond)pays Interest at J2

Question 5

Multiple Choice

A $4000 accumulation bond (compound interest bond) pays interest at j2 = 8% and is redeemable for $4100 in 10-years.It is bought to yield j2 = 7%.What is the price of this bond?


A) $4454.99
B) $4334.51
C) $4045.64
D) $3936.22

Correct Answer:

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