What Would the Yield to Maturity Be on a Four-Year

question 1

Multiple Choice

What would the yield to maturity be on a four-year zero coupon bond purchased today?

• A)5.75%
• B)6.30%
• C)5.65%
• D)5.25%
• E)none of the above.

---

Definitions:

Interdependence Theory

A social psychology theory that explains how the outcomes individuals receive in relationships are contingent upon the actions of both partners in the relationship.

Principle of Reinforcement

The principle of reinforcement is a concept in behaviorism that describes how the consequences of a behavior increase or decrease the likelihood of that behavior being repeated.

Social Exchange Theory

A concept in social psychology which suggests that human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives.

Comparison Level

One’s personal standard of what constitutes an acceptable balance of rewards and costs in a relationship.