Can you explain your thinking and whether it will be paid on 2 January affects anything with respect to the calculation.

1. The British Government has a "Consol" bond outstanding, first issued during World War One, that pays 100 in interest each year (forever), with the coupon being paid on 1 January each year. Assume that the appropriate discount rate is 4% (0.04) in annualized terms. Which option is closest to the value of the Consol bond on 2 January? Frowing perp A2400 8) 2,500 C) 2,600 D) 5,000 > 2500 0.64