A 5-Year Bond with 10% Coupon Rate and $1000 Face

question 36

Multiple Choice

A 5-year bond with 10% coupon rate and $1000 face value is selling for $1123. Calculate the yield to maturity on the bond assuming annual interest payments.

• A) 10.0%
• B) 8.9%
• C) 7.0%
• D) None of the above

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Definitions:

Savannah

A mixed ecosystem characterized by the coexistence of trees and grassland, often found in regions with seasonal rainfall patterns.

Food Web

A complex interconnection of all the food chains in an ecosystem.

Food Chain

A sequence that displays the feeding relationships between organisms, showing how energy and nutrients flow from one organism to another.

Energy Flow

The transfer of energy through a community of organisms by the feeding of one organism on another.