The YTM of a 3-Year Default-Free Security with a Face

question 112

Multiple Choice

The YTM of a 3-year default-free security with a face value of $1000 and an annual coupon rate of 6% is closest to:

• A)5.5%.
• B)5.8%.
• C)5.7%.
• D)5.2%.

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Definitions:

Proprietorships

Businesses owned and operated by a single individual, bearing unlimited liability for business debts and obligations.

Corporate Profits Tax

A tax levied on the earnings of corporations, usually calculated as a percentage of their net profits.

Individual Income Tax Returns

Documents filed by individuals to report income, claim deductions, and determine the amount of tax owed to or refundable by the government.

Corporate Profits Tax

A tax imposed on the net income of a corporation, calculated after operational and capital expenses have been deducted.