1. The
2. The current interest rate on a 10-year coupon bond (with face value = $1,000 and annual coupon rate = 3.25%) is 2.42%. This implies: (there are more than one answer)
Question 14 options:
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the price of this bond is $1,000. |
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the price of this bond is greater than $1,000. |
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the price of this bond is less than $1,000. |
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the buyer of the bond will have a return of 2.42% if she sells the bond next year. |
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the buyer of this bond will receive $32.5 from the bond issuer every year before maturity while holding the bond. |
3. True or False? Last year you purchased a bond with an interest rate of 5%. Now the interest rate on the bond market drops to 4%. Then the face value of your bond is lower.
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