A Coupon Bond That Pays Interest of $40 Semi-Annually Has

question 40

Multiple Choice

A coupon bond that pays interest of $40 semi-annually has a par value of $1,000, matures in four years, and is selling today at a $36 discount from par value.The yield to maturity on this bond is

• A)8.69%.
• B)9.09%.
• C)10.43%.
• D)9.76%.

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Definitions:

Social Identity Theory

A theory positing that individuals define themselves in terms of group memberships and these group identifications influence behavior and attitudes.

Normative Influence

In groups, a form of influence that occurs when a member conforms to group norms in order to receive the rewards or avoid the punishments that are contingent on adherence to these norms.

Informational Influence

A social influence process where individuals change their thoughts, beliefs, or behaviors based on information or evidence from others.

Minimal Groups

Experimental paradigms used in social psychology to demonstrate how even arbitrary and seemingly meaningless distinctions between groups can lead to discrimination and prejudice.