Zero-Coupon Bonds Issued in 2006 Are Due in 2016

question 99

Multiple Choice

Zero-coupon bonds issued in 2006 are due in 2016. If they were originally sold at 55 percent of face value, the implied yield to maturity at issuance is

• A)1.062%.
• B)6.16%.
• C)8.31%.
• D)cannot be determined, need more information.

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Definitions:

Undue Hardship

A term used to describe significant difficulty or expense incurred by an employer in accommodating an employee's medical or religious needs under laws such as the Americans with Disabilities Act (ADA).

Reasonable Accommodation

Adjustments or modifications provided in a work environment to enable individuals with disabilities to perform their job.

Bona Fide Occupational Qualification

A work requirement that is necessary for the normal operation of a particular business or enterprise and may legally exclude individuals from a job based on protected characteristics in certain circumstances.

Disparate Treatment

A form of discrimination that occurs when employees are treated differently based on protected characteristics, such as race, age, or gender, without justification.