Necked Amber purchased a bond for $1,038.90 exactly two years ago. At that time, the bond had

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Question:

Necked Amber purchased a bond for $1,038.90 exactly two years ago. At that time, the bond had a maturity of five years and a coupon rate of 10% (paid semi-annually). Assuming the rates below are the prevailing rates for this type of bond at different maturities, calculate the price that Amber could sell her bond for today. Maturities 1 year 3 years 5 years 10 years 30 years Interest rates 6% 7% 8.5% 10% 12% Question 7 options:

a) $1,038.31

b) $1,078.73

c) $1,079.93

d) $1,060.08