You Own a Principal STRIPS Which Is Based on a 4.5

question 6

Multiple Choice

You own a principal STRIPS which is based on a 4.5 percent coupon Treasury bond that matures in 20 years.The STRIPS is priced at $22,868 and has a par value of $50,000.What is the yield to maturity on the STRIPS?

• A) 3.79 percent
• B) 3.90 percent
• C) 3.93 percent
• D) 3.95 percent
• E) 3.99 percent

---

Definitions:

Opportunities

Situations or conditions that present possibilities for advancement, growth, or success in personal, professional, or organizational contexts.

Bureaucratic Rules

Formal regulations and procedures established by organizations or governments to control and manage operations.

Policies

Guidelines or principles that govern the operations, decisions, and actions within an organization.

New Assignments

Tasks or projects that are allocated to an individual or team for the first time.