Bonds X and Y are identical, including the risk class. The only difference between A...
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Bonds X and Y are identical, including the risk class. The only difference between A and B is in the coupon payment as shown below.
| Bond X | Bond Y | |
| Face value | $1,000 | $1,000 |
| Annual Coupon Payment | $120 | $130 |
| Payment Frequency | Semiannual | Annual |
| Years to maturity | 15 | 15 |
| Price | $919.43 | ? |
What is the price of bond Y?
| A. | $925.88 | |
| B. | $973.44 | |
| C. | $940.92 | |
| D. | $1,007.15 | |
| E. | $956.95 | |
| F. | $989.75 |
You are 20 years old and plan to retire with $1,000,000. You have $20,000 available for investment now. You deposit this into an account that pays 9% interest compounded annually? How old will you be when the account has the target amount? (Answers are rounded.)
| A. | 55 | |
| B. | 57 | |
| C. | 61 | |
| D. | 63 | |
| E. | 65 | |
| F. | 59 |
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