If a $10,000 Face-Value Discount Bond Maturing in One Year

question 40

Multiple Choice

If a $10,000 face-value discount bond maturing in one year is selling for $5,000,then its yield to maturity is

• A)5 percent.
• B)10 percent.
• C)50 percent.
• D)100 percent.

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Definitions:

Capital Maintenance

An accounting concept focused on ensuring that a company's capital is preserved, aiming to maintain the purchasing power of shareholders' capital over time.

Corporate Income

The total income of a corporation or business entity, derived from its operations and investment activities.

Net Assets

The total assets of a company or individual minus their total liabilities, reflecting the actual value of the entity's holdings.

Core Activities

Core activities are the central and essential operations or functions of a business that are directly related to its main purpose and generate the majority of its revenue and profits.