Which of the Following $5,000 Face-Value Securities Has the Highest

question 25

Multiple Choice

Which of the following $5,000 face-value securities has the highest yield to maturity?

• A) A 6 percent coupon bond selling for $5,000
• B) A 6 percent coupon bond selling for $5,500
• C) A 10 percent coupon bond selling for $5,000
• D) A 12 percent coupon bond selling for $4,500

---

Definitions:

Grain

Small, hard seeds, especially the seeds of various food plants such as wheat, corn, rye, oats, and barley.

Real Interest Rate

The real interest rate adjusts the nominal interest rate to remove the effects of inflation, reflecting the true cost of borrowing or the real yield on savings.

Future Consumption

Refers to the use or purchase of goods and services at a future date, an important concept in economics related to saving and investment decisions.

Current Consumption

The total value of all goods and services consumed by households and individuals in the present time period.