Suppose that the price of a bond is equal to the sum of the present value of its future payments.Suppose further that this bond pays $50 in one year and $1,050 in two years.What is the price of the bond if the interest rate is 5 percent?
A) $1,050.00
B) $1,045.35
C) $1,000.00
D) $945.35
Correct Answer:
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