Sentry Corp

question 59

Multiple Choice

Sentry Corp.bonds have an annual coupon payment of 7.25%.The bonds have a par value of $1,000, a current price of $1,125, and they will mature in 13 years.What is the yield to maturity on these bonds?

• A) 5.56%
• B) 5.85%
• C) 6.14%
• D) 6.45%
• E) 6.77%

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Definitions:

Bonds

Fixed income investments where an investor loans money to an entity which borrows the funds for a defined period at a variable or fixed interest rate.

Money Markets

Sections of the financial market where short-term financial instruments and securities are traded, helping firms and governments manage liquidity.

Capital Markets

Financial markets where long-term debt or equity-backed securities are bought and sold, providing businesses and governments with a platform to raise funds.

Corporate Debt

Borrowed money that a company owes to creditors, which can be in the form of bonds, loans, or other debt instruments.