What Is the YTM of a Four-Year Bond with a Par

question 44

Multiple Choice

What is the YTM of a four-year bond with a par value of $1,000 and a 4 percent coupon rate when the bond is priced at $932.35? Assume coupons are paid annually.

• A)2.96%.
• B)5.92%.
• C)5.95%.
• D)6.22%.

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Definitions:

Unit Product Cost

The total cost incurred to produce, package, and place a product ready for sale, divided by the number of units produced.

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed overhead—in the cost of a product.

Unit Product Cost

The calculation of the total cost (including materials, labor, and overhead) to produce a single unit of a product.

Variable Costing

A costing method in which all variable manufacturing costs are included as inventoriable costs, while fixed manufacturing overhead is treated as an expense of the period.