A Bond with a Par Value of $1,000 Has an Annual

question 58

Multiple Choice

A bond with a par value of $1,000 has an annual interest payment of $85.The bond currently sells for $850 and has 8 years to maturity.Which of the following is true?

• A)The current yield on the bond must be 8.5%.
• B)The investor's required rate of return must be 8.5%.
• C)The coupon rate must be 8.5%.
• D)The yield to maturity must be 8.5%.

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Definitions:

Age Groups

Categories of individuals classified according to their age, often used in research, marketing, and planning to tailor strategies or understand demographic trends.

Diastolic Blood Pressure

The pressure in the arteries when the heart rests between beats, representing the minimum blood pressure.

Experimental Drug

A pharmaceutical compound under clinical investigation to assess its safety and effectiveness for human use.

Dosage

The size or frequency of a dose of a medicine or drug that has been officially recommended.