If a $5,000 Face-Value Discount Bond Maturing in One Year

question 12

Multiple Choice

If a $5,000 face-value discount bond maturing in one year is selling for $5,000,then its yield to maturity is

• A)0 percent.
• B)5 percent.
• C)10 percent.
• D)20 percent.

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Definitions:

Drawee

The party in a draft or bill of exchange who is directed to pay, typically a bank.

Internal Control

Procedures and policies implemented by a company to safeguard its assets, ensure financial accuracy, and promote operational efficiency.

Canceled Checks

Checks that have been paid and processed by a bank, no longer negotiable, serving as proof of payment.

Negotiable

Capable of being transferred or exchanged with ease, often referring to financial instruments.