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An Investor Purchases a 20-Year, $1,000 Par Value Bond That

Question 38

Multiple Choice

An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond?


A) $828.
B) $893.
C) $1,000.
D) $1,686.

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