An FI Manager Purchases a Zero-Coupon Bond That Has Two

question 97

Multiple Choice

An FI manager purchases a zero-coupon bond that has two years to maturity.The manager paid $76.95 per $100 for the bond.The current yield on a one-year bond of equal risk is 12 percent, and the one-year rate in one year is expected to be either 16.65 percent or 15.35 percent.Either rate is equally probable. Given the expected one-year rates in one year, what are the possible bond prices in one year?

• A)$85.22 and $86.25.
• B)$85.73 and $86.69.
• C)$85.22 and $86.69.
• D)$85.73 and $86.25.
• E)$83.35 and $84.65.

Comprehend how overapplied or underapplied manufacturing overhead affects financial statements.

Recognize the accounting treatment for raw materials and manufacturing overhead.

Identify the correct journal entries for the movement of materials and the transfer of costs in the production process.

Understand the calculation of the cost of goods manufactured.

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