What Is the Yield to Maturity on a 15-Year, Zero-Coupon

question 130

Multiple Choice

What is the yield to maturity on a 15-year, zero-coupon bond selling for 37.5% of par value?

• A) 4.40%
• B) 5.60%
• C) 5.97%
• D) 6.76%
• E) 37.50%

---

Definitions:

Indirect Method

A technique used in financial accounting to calculate cash flows from operations by adjusting net income for non-cash transactions.

Operating Activities

The primary, day-to-day activities of a business that relate to its production, sales, and delivery of goods and services.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, representing the wear and tear on the asset over time.

Statement of Cash Flows

A document that provides insight into how alterations in balance sheet items and earnings affect cash and cash-like assets, dissecting the analysis into operating, investing, and financing divisions.