Determine the Yield to Maturity (To the Nearest Tenth of 1

question 8

Multiple Choice

Determine the yield to maturity (to the nearest tenth of 1 percent) of an 8-year zero coupon bond ($1,000 par value) that is currently selling for $521.

• A) 6.0%
• B) 11.5%
• C) 7.9%
• D) 8.5%

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Definitions:

Payable

Refers to an amount of money that is owed by a person or company and is required to be paid to another party.

Bearing Them

Taking responsibility for or dealing with something, often implying a burden or hardship that must be endured.

Transferable

Characteristic of an item, right, or obligation, that allows it to be passed from one party to another, often involving legal documentation.

Negotiable

Capable of being bought, sold, or transferred to another party, often used to describe financial instruments.