A Coupon Bond Has an Annual Coupon of $75,a Par

question 62

Multiple Choice

A coupon bond has an annual coupon of $75,a par value of $1,000,and a market price of $900.Its current yield equals

• A) 7.50%.
• B) 8.33%.
• C) its yield to maturity.
• D) Not enough information has been provided to calculate the current yield for this bond.

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Definitions:

Mining Site

A location where extraction of minerals, metals, and other geological materials from the earth takes place.

Depletion Expense

The allocation of the cost of natural resources over their productive life.

Residual Value

The estimated amount that an asset will realize upon its disposal at the end of its useful life, after deducting any potential costs of disposal.

Extracted Ore

Raw minerals taken from the ground, which may be processed to extract valuable metals or other resources.