Question: suppose a U.S. treasury bond will pay $1,900 five years from now. If the going interest rate on 5-year treasury bonds is 4.25%, how much


suppose a U.S. treasury bond will pay $1,900 five years from now. If the going interest rate on 5-year treasury bonds is 4.25%, how much is the bond worth today? a. $1,805.34 b. $1,419.58 C. $1,543.03 d. $1,635.61 e. $1,280.71 Suppose the U.S. Treasury offers to sell you a bond for $617.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price? a. 10.13% b. 9.02% c. 9.83% d. 7.70% e. 10.43%
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