A Fletchbuild coupon bond matures in four years, pays a semi-annual coupon rate of 10.5 % and will be redeemed at a face value of $1,000 at maturity. If you require an annual return of 12 % (semi-annually compounded) on this investment what is the most you should be willing to pay for this bond? A. $ 941.71 SSS B. $ ABCDE 953.43 $ 968.11 C. D. $ 1,000.00 E. $ 1,047.04

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
Section: Chapter Questions
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A Fletchbuild coupon bond matures in four years, pays a semi-annual coupon rate
of 10.5 % and will be redeemed at a face value of $1,000 at maturity. If you require
an annual return of 12 % (semi-annually compounded) on this investment what is the
most you should be willing to pay for this bond?
A. $ 941.71
SSS
B. $
ABCDE
953.43
$ 968.11
C.
D.
$ 1,000.00
E.
$ 1,047.04
Transcribed Image Text:A Fletchbuild coupon bond matures in four years, pays a semi-annual coupon rate of 10.5 % and will be redeemed at a face value of $1,000 at maturity. If you require an annual return of 12 % (semi-annually compounded) on this investment what is the most you should be willing to pay for this bond? A. $ 941.71 SSS B. $ ABCDE 953.43 $ 968.11 C. D. $ 1,000.00 E. $ 1,047.04
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