The YTM of a 4-Year Default-Free Security with a Face

question 7

Multiple Choice

The YTM of a 4-year default-free security with a face value of $1000 and an annual coupon rate of 5.25% is closest to:

• A)5.2%.
• B)5.0%.
• C)4.9%.
• D)5.25%.

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Definitions:

Availability Heuristic

A mental shortcut that relies on immediate examples that come to mind when evaluating a specific topic or decision.

Stomach Cancer

A type of cancer that begins in the stomach lining, often as a result of long-term inflammation and other risk factors.

Murder

The unlawful killing of another human being without justification or valid excuse, typically considered one of the most serious forms of violent crime.

Behavioral Economics

A field of study blending insights from psychology and economics to explore how people make decisions based on biases, emotions, and other non-rational factors.