If the Yield to Maturity of All of the Following

question 71

Multiple Choice

If the yield to maturity of all of the following bonds is 6%, which trades at the greatest premium per $100 face value?

• A) a bond with a $10,000 face value, four years to maturity and 6.2% semiannual coupon payments
• B) a bond with a $1000 face value, five years to maturity and 6.3% annual coupon payments
• C) a bond with a $500 face value, ten years to maturity and 5.2% annual coupon payments
• D) a bond with a $5000 face value, several years to maturity and 5.5% annual coupon payments

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Definitions:

Fees Earned

Revenue recognized by a company or individual in exchange for services rendered.

Adjusted Trial Balance

A financial statement listing all the accounts and their final balances after all adjustments have been made.

Closing Entries

At the end of an accounting cycle, transactions are recorded to shift balances from provisional accounts to lasting accounts.

Post-closing Trial Balance

A summary of all account balances after closing entries are made, used to check the balance of debits and credits.