What Is the Approximate Yield on a 20-Year 10 Percent

question 11

Multiple Choice

What is the approximate yield on a 20-year 10 percent annual coupon less developed country (LDC) bond selling at 75 cents on the dollar? (Choose the closest answer)

• A)10 percent.
• B)40 percent.
• C)14 percent.
• D)25 percent.
• E)Cannot be determined.

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Definitions:

Bootstrap Confidence Interval

A statistical technique for estimating the uncertainty of a parameter by resampling with replacement.

Percentile Method

A statistical calculation used to determine the value below which a given percentage of observations in a data set falls.

Resamples

The process of drawing repeated samples from observed data, with the aim of estimating a population parameter.

Standard Error

A statistical measure that quantifies the variability or dispersion of a sample mean relative to the true population mean.