If a $5,000 Face-Value Discount Bond Maturing in One Year

question 12

Multiple Choice

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

• A)0 percent.
• B)5 percent.
• C)10 percent.
• D)20 percent.

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Definitions:

Counting Method

A mathematical technique used to determine the total number of possible outcomes in a given situation.

Count And Divide

A method involving enumeration and separation into parts or groups, typically used for analytical or problem-solving purposes.

Intuitive Judgment

The ability to understand or know something without the need for conscious reasoning or direct evidence.

Bias

A tendency to favor or lean towards a particular perspective, judgment, or result over others, often in a way considered to be unfair.