Alaskan Motors Has Outstanding Bonds That Mature in 14 Years

question 86

Multiple Choice

Alaskan Motors has outstanding bonds that mature in 14 years and pay $32.50 every 6 months in interest. The par value is $1,000 per bond and the market value is $981. The coupon rate is _____ percent, the current yield is _____ percent, and the yield to maturity is _____ percent.

• A) 6.50; 6.37; 6.67
• B) 6.50; 6.63; 6.71
• C) 6.50; 6.67; 6.71
• D) 7.00; 6.37; 6.67
• E) 7.00; 6.67; 6.71

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Definitions:

High Reliability

The concept or state of being able to function under high levels of uncertainty or risk without significant failures or accidents.

Content Validity

The extent to which a test measures the entire range of material or behavior that is supposed to be measured.

Low Validity

A term indicating that the effectiveness or correctness of a measurement or test is questionable or lacking.

Binet-Simon Scale

The first intelligence test, developed by Alfred Binet and Théodore Simon, designed to identify children with learning impairments.