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One year ago Lerner and Luckmann Co. issued 15-year, noncallable, 5.3% annual coupon bonds at their par value of $1,000. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 14 years to maturity? Select the correct answer. a. $983.62 b. $986.42 c. $989.22 d. $980.82 e. $992.02

One year ago Lerner and Luckmann Co. issued 15-year, noncallable, 5.3% annual coupon bonds at their par value of $1,000. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 14 years to maturity? Select the correct answer. a. $983.62 b. $986.42 c. $989.22 d. $980.82 e. $992.02

Essentials Of Investments
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
Problem 1PS
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One year ago Lerner and Luckmann Co. issued 15-year, noncallable, 5.3% annual coupon bonds at their par value of $1,000. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 14 years to maturity? Select the correct answer. a. $983.62 b. $986.42 c. $989.22 d. $980.82 e. $992.02
Transcribed Image Text:One year ago Lerner and Luckmann Co. issued 15-year, noncallable, 5.3% annual coupon bonds at their par value of $1,000. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 14 years to maturity? Select the correct answer. a. $983.62 b. $986.42 c. $989.22 d. $980.82 e. $992.02
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