Calculate the Realised Yield on a $1,000 Face Value,9 Per

question 2

Multiple Choice

Calculate the realised yield on a $1,000 face value,9 per cent coupon bond (with annual payments of coupons) purchased for $800 and sold one year later for $850 (after a payment of coupon) .

• A)9%
• B)11.25%
• C)14.5%
• D)17.5%

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Definitions:

FIFO

FIFO (First-In, First-Out) is an inventory cost valuation method assuming that the oldest items of inventory are sold first and newer inventories last, affecting the cost of goods sold and ending inventory valuation.

LIFO

Last In, First Out, an inventory valuation method that assumes goods purchased last are the first to be used or sold, affecting cost of goods sold and inventory value.

Average

A statistical measure that denotes the central value of a set of numbers.

Dollar-Value LIFO

An inventory valuation method that uses the last-in, first-out (LIFO) principle but measures inventory in dollar amounts rather than in physical units.