Which Bond Will Have a Higher Yield to Maturity, a $1,000

question 43

Essay

Which bond will have a higher yield to maturity, a $1,000 face value bond, with a 5.0% coupon rate that sells for $900; or a $1,000 face value bond, with a $50 annual coupon that sells for $1,050? Explain your choice.

---

Definitions:

Semi-Oscillating

Pertaining to a movement that is partially rotational or vibrating, often used to describe components in mechanical systems.

Trailer Bolster Plate

A reinforced plate on a trailer designed to distribute load weight or attach components such as legs or wheels.

Secondary Lock

Any of a number of different types of backup locking device; an example is the secondary locking device used on most fifth wheels, which is either manually or automatically engaged.