If the Yield to Maturity of All of the Following

question 28

Multiple Choice

If the yield to maturity of all of the following bonds is 6%, which will trade at the greatest premium per $100 face value?

• A) a bond with a $10,000 face value, four years to maturity and 6.2% semiannual coupon payments
• B) a bond with a $500 face value, seven years to maturity and 5.2% annual coupon payments
• C) a bond with a $5,000 face value, seven years to maturity and 5.5% annual coupon payments
• D) a bond with a $1,000 face value, five years to maturity and 6.3% annual coupon payments

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Definitions:

Dependent Clause

A collection of words that includes both a subject and a verb, yet fails to convey a full idea and is unable to function independently as a sentence.

Complex Sentence

A sentence that contains one independent clause and at least one dependent clause, expressing multiple ideas.

Independent Clauses

Sentences or parts of sentences that can stand alone because they contain both a subject and a predicate.

Compound Sentences

Sentences that contain two or more independent clauses, often joined by a conjunction or punctuation.