A $1,000 Face Value Bond Is Selling for $1,016

question 44

Multiple Choice

A $1,000 face value bond is selling for $1,016.36.The bond pays interest semiannually and has 3.5 years to maturity.The yield to maturity is 5.48 percent.The current yield is ________ percent and the coupon rate is ________ percent.

• A) 5.86; 5.90
• B) 5.90; 6.00
• C) 5.90; 5.86
• D) 6.00; 5.90
• E) 6.00; 5.86

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Definitions:

Materials Quantity Variance

This variance measures the difference between the actual quantity of material used in production and the standard quantity allowed, multiplied by the standard cost per unit of material.

Direct Labor Costs

Expenses related to employees who directly produce a product or provide a service, such as wages for assembly line workers.

Work in Process Inventory

Inventory that includes materials and labor that are currently in the production process but not yet completed.

Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, reflecting how effectively a company is purchasing materials.