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You Are Worried That Someone in the Audience Will Ask

question 3

Multiple Choice

You are worried that someone in the audience will ask a question during the presentation, so you start by telling the audience that you will not be taking questions until the end of the presentation. After ten minutes, however, a member of the audience interrupts with a question. Which ONE of the following would be the best course of action?

Compute total returns considering both income and appreciation aspects of an investment.
Interpret and apply compound interest calculations to predict future investment values and returns based on historical data.
Understand the concepts of income yield, capital gain yield, and total return in bond investments.
Calculate the income yield on bond investments.

Definitions:

Bond Discount

The difference between the bond's face value and its selling price when the bond is sold for less than its face value.

Bond Premium

The amount by which the market price of a bond exceeds its face value.

Annual Interest Expense

The total amount of interest a company expects to pay on its debts over a year.

$100,000 Bond

A debt instrument issued by a corporation or government entity, with a principal amount of $100,000, to raise funds from investors.

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