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

question 65

Multiple Choice

What is the approximate yield on a 20-year 10 percent annual coupon less developed country (LDC) bond selling at 25 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:

Physical Capital

Tangible assets such as buildings, machinery, and equipment used in the production of goods and services.

Human Capital

The sum of abilities, expertise, and non-material assets possessed by people that can generate economic benefits for themselves, their employers, or their local area.

Physical Capital

Tangible assets used in the production of goods and services, such as buildings, machinery, and equipment.

Economic Profit

The profit a company makes after subtracting both its explicit and implicit costs from total revenues.