Suppose the Following Bond Quote for the Beta Company Appears

question 2

Multiple Choice

Suppose the following bond quote for the Beta Company appears in the financial page of today's newspaper.Assume the bond has a face value of $1,000 and the current date is April 15, 2009.What is the yield to maturity on this bond?

• A)6.64 percent
• B)8.96 percent
• C)10.23 percent
• D)12.47 percent
• E)13.27 percent

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Definitions:

Secured Debt

A debt that is backed by collateral, providing the lender a claim to the asset if the loan is defaulted.

Transfer Ownership

The act of transferring the legal rights of an asset from one party to another.

Agreement

A mutual arrangement between two or more parties that is enforceable by law.

Note Payable

A formal written agreement to pay a specific sum of money at a future date, representing a liability for the borrower.