On 1 January 2017 Quincy bought €500,000 of 6% loan stock for €490,420.  Interest is receivable on 31 December each year and the loan stock will be redeemed at a 15% premium on 31 December 2021.  The effective rate of interest is 9% per annum and Quincy intends to hold the loan stock until it is redeemed.

Answer rating: 100% (QA)

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