The Discount Rate That Sets the Present Value of the Promised

question 68

Multiple Choice

The discount rate that sets the present value of the promised bond payments equal to the current market price of the bond is called:

• A)the current yield.
• B)the yield to maturity.
• C)the zero-coupon yield.
• D)the discount yield.

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Definitions:

Surplus Funds

Excess money that remains after all expenses and obligations have been met, which can be saved or invested.

Social Security

A government program that provides financial assistance to people with inadequate or no income, primarily targeting the elderly, disabled, and survivors of deceased workers.

Middle-income Recipients

Individuals or families whose income level falls in the middle range of the socioeconomic spectrum in their society.

Workforce

The total number of people employed or seeking employment in a country or specific sector.