A $1,000 Par Bond with Five Years to Maturity Is

question 9

Multiple Choice

A $1,000 par bond with five years to maturity is currently priced at $892. Annual interest payments are $90. What is the yield to maturity?

• A)13 percent
• B)12 percent
• C)11 percent
• D)10 percent

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Definitions:

Energy Motivation

The drive to engage in activities due to an intrinsic desire to expend energy and seek stimulation.

Observation Motivation

Observation motivation is the drive or inclination to learn or acquire new behaviors, skills, or information by observing others rather than through direct experience.

Foot-In-The-Door Effect

A mental phenomenon wherein consenting to a minor request enhances the chances of acquiescing to a more significant request subsequently.

Low Balling

A persuasion technique often used in sales where an initially low price is presented to secure agreement from the buyer, only to increase the cost through the addition of extras or disclosure of hidden costs.