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:

Collateralized Borrowing

A loan secured by pledging an asset as collateral, ensuring the lender can seize the asset if the borrower defaults.

Significant Benefits

These refer to notable advantages or positive impacts, often seen in the context of employee compensation, strategic decisions, or investments.

Mortgage Portfolio

A collection of mortgage loans held by a financial institution or investor that can generate income through interest payments made by the borrowers.

Carrying Value

The book value of an asset as shown on the balance sheet, calculated as the original cost minus accumulated depreciation, impairment charges, or amortization.