A Bond with No Expiration Date Has a Face Value

question 321

Multiple Choice

A bond with no expiration date has a face value of $10,000 and pays a fixed 10 percent interest. If the market price of the bond rises to $11,000, the annual yield approximately equals

• A) 11 percent.
• B) 10 percent.
• C) 9 percent.
• D) 8 percent.

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Definitions:

Properly Calibrated

Refers to the accurate adjustment of instruments, equipment, or devices to ensure their measurements meet the required standards.

Electronic Control

Systems or devices that use electrical signals to regulate or manage other electronic systems.

Significant Level

This term likely refers to significance level; thus it is the threshold at which the p-value of test results must fall below to reject the null hypothesis, indicating statistical significance.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, indicating how spread out the data points are.