The Yield to Maturity on a Consol Bond That Pays

question 35

Multiple Choice

The yield to maturity on a consol bond that pays $100 yearly and sells for $500 is

• A) 5 percent.
• B) 10 percent.
• C) 12.5 percent.
• D) 20 percent.
• E) 25 percent.

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Definitions:

Government Purchases

Expenditures by the government on goods and services that are part of a country's national budget.

Net Exports

The difference between a country's total value of exports and total value of imports; positive net exports mean a country exports more than it imports.

Transfer Payments

Transactions where no goods or services are exchanged, involving the reallocation of money from one party to another, often by the government to support individuals or groups.

Government Purchases

Expenditures made by the government for goods and services that directly satisfy public needs or initiate government activities.