A $1,000 Par Bond with Five Years to Maturity Is

question 9

Multiple Choice

A $1,000 par bond with five years to maturity is currently priced at $892. Annual interest payments are $90. What is the yield to maturity?

• A)13 percent
• B)12 percent
• C)11 percent
• D)10 percent

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Definitions:

Open Market

An economic environment that allows for the free exchange of goods and services between willing parties without undue restrictions.

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated as the company's total liabilities divided by its total assets.

Real Estate Investment Trusts

Companies that own, operate, or finance income-generating real estate, offering investors a way to invest in real estate through the purchase of publicly traded shares.

Portfolio Turnover

This term refers to the frequency at which assets within a portfolio are bought and sold by the manager, indicating trading activity level and potential costs.