The Formula for the Yield to Maturity,i,on a Discount Bond

question 9

Multiple Choice

The formula for the yield to maturity,i,on a discount bond is

• A) i = (Face value - Price)/Price.
• B) i = (Price - Face value)/Price.
• C) i = (Face value - Price)/Face value.
• D) i = (Price - Face value)/Face value.

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Definitions:

HDC (Holder in Due Course)

A party possessing a negotiable instrument, like a check, who has taken it in good faith and for value, and thus has certain protections.

Negotiable Instrument

A legal document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the transferable right to receive the payment.

Thief

An individual who steals property belonging to another, with the intent to permanently deprive the owner of it.

Impliedly Promises

refers to commitments or guarantees that are not explicitly stated but are inferred from actions, circumstances, or the nature of an agreement.