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:

Break-Even Point

The level of sales at which total revenues equal total expenses, resulting in no profit or loss for the business.