The Yield to Maturity on a Consol Bond That Pays

question 35

Multiple Choice

The yield to maturity on a consol bond that pays $100 yearly and sells for $500 is

• A) 5 percent.
• B) 10 percent.
• C) 12.5 percent.
• D) 20 percent.
• E) 25 percent.

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Definitions:

Perpetual Inventory System

An inventory management method that continuously updates the balance of merchandise by recording each sales and purchase transaction.

Inventory Account

An asset account on the balance sheet that reports the value of a company's inventory, which includes goods that are in the process of being produced for sale and finished goods.

Perpetual Inventory System

A method of continuously tracking inventory levels, costs, and sales in real time, reducing the need for physical inventories.

Purchases Account

An account used in an accounting system to record the purchase of goods or services that a business intends to resell.