A client is considering an investment in an 8%, $1,000 par value, 5-year Government of Canada bond. Assuming a discount rate of 6%, and semi-annual coupon payments, what should the client pay for this bond? O a) Not pay more than $1,060. Ob) Not pay more than $1,085.30. Oc) Not pay more than $1,084.25. Od) Not pay more than $1,000.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A client is considering an investment in an 8%, $1,000 par value, 5-year Government
of Canada bond. Assuming a discount rate of 6%, and semi-annual coupon payments,
what should the client pay for this bond?
a) Not pay more than $1,060.
Ob) Not pay more than $1,085.30.
Oc) Not pay more than $1,084.25.
O d) Not pay more than $1,000.
Transcribed Image Text:A client is considering an investment in an 8%, $1,000 par value, 5-year Government of Canada bond. Assuming a discount rate of 6%, and semi-annual coupon payments, what should the client pay for this bond? a) Not pay more than $1,060. Ob) Not pay more than $1,085.30. Oc) Not pay more than $1,084.25. O d) Not pay more than $1,000.
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