What Is the Approximate Yield on a 20-Year 10 Percent

question 68

Multiple Choice

What is the approximate yield on a 20-year 10 percent annual coupon LDC bond selling at 75 cents on the dollar? (choose the closest answer)

• A)10 percent.
• B)40 percent.
• C)14 percent.
• D)25 percent.
• E)Cannot be determined.

---

Definitions:

Opportunity Cost

The charge of letting go of the subsequent best choice when deliberating on options.

Tuition

The fee for instruction, especially at a formal institution of learning.

Work Hours

The amount of time an individual spends performing tasks or duties for an employer during a given period.

Marginal Cost

The cost to produce one additional unit of a product or service.