The Yield to Maturity on a Zero Coupon, $1,000 Par

question 44

True/False

The yield to maturity on a zero coupon, $1,000 par value bond which will mature in 10 years is 5%. The price of the bond is $500.

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Definitions:

Basis

The initial value of an asset for tax purposes, used to calculate depreciation, amortization, and determines the gain or loss on the asset's sale.

Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the company's assets and earnings.

Fiscal Year-End

The last day of a company's accounting period, which is used for financial reporting and tax purposes, and can vary between organizations.

Automatic Extension

A provision allowing taxpayers to automatically extend their deadline for submitting tax returns or other required documents, without needing to provide a reason.