A Bond Has a Face Value of $20,000 and Matures

question 21

Multiple Choice

A bond has a face value of $20,000 and matures in 62 days. What is the bank discount yield if the bond is currently selling for $19,792.30?

• A) 4.67 percent
• B) 4.87 percent
• C) 5.48 percent
• D) 5.78 percent
• E) 6.03 percent

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Definitions:

Capital

Refers to wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.

Labor

The effort by humans to produce goods or provide services in the economy, often measured in terms of hours worked or output produced.

Metal Alloy

A mixture of two or more elements, where at least one is a metal, created to enhance properties such as strength, durability, or resistance to corrosion.

Zinc

A chemical element with the symbol Zn and atomic number 30, often used for galvanizing iron and steel to protect against rust.