Business

Paul

4 June, 14:51

If $500,000 of 10-year bonds with interest payable semiannually are sold for $494,040 based

on (1) the present value of $500,000 due in 20 periods at 5% plus (2) the present value of

twenty $25,000 payments at 5%, the nominal or contract rate and the market rate of interest

for the bonds are both 10%.

True

False

+5

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