The Following Information Relates to Questions
a Bond with 5

question 42

Multiple Choice

The following information relates to Questions
A bond with 5 years remaining until maturity is currently trading for 101 per 100 of par value. The bond offers a 6% coupon rate with interest paid semi-annually. The bond is first callable in 3 years, and is callable after that date on coupon dates according to the following schedule: $\begin{array}{lc}\text { End of Year } & \text { Call Price } \\\hline 3 & 102 \\4 & 101 \\5 & 100 \\\hline\end{array}$

-The bond's annual yield-to-maturity is closest to:

• A) 2.88%.
• B) 5.77%.
• C) 5.94%.

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Definitions:

Receivable Turnover

A financial metric indicating how efficiently a company collects revenue from its credit customers by measuring the number of times average accounts receivable are collected during a period.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Tax Rate

The percentage of income or value of a good, service, or asset collected by the government as tax.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding the cost of materials and direct labor.