A Treasury Security That Matures in One Year Has a Face

question 50

Multiple Choice

A Treasury security that matures in one year has a face value of $10,000 and sells for $9,300. What is its yield-to-maturity, to the nearest tenth of a percent?

• A)9.3%
• B)7.5%
• C)5.5%
• D)7.0%

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Definitions:

Domestic Price

The price of goods or services within a country's borders, exclusive of any tariffs, export fees, or import costs.

Tariff

A tax imposed on imported goods and services, aimed at making these goods costlier and protecting domestic industries.

Fixing Exchange Rates

The act of establishing the value of one currency in terms of another through government or central bank intervention, rather than allowing it to be determined by market forces.

Black Markets

Underground economies where goods or services are traded illegally, bypassing official regulations or laws.