If the Yield to Maturity of All of the Following

question 74

Multiple Choice

If the yield to maturity of all of the following bonds is 6%,which trades 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,ten years to maturity and 5.2% annual coupon payments
• C)a bond with a $5000 face value,several years to maturity and 5.5% annual coupon payments
• D)a bond with a $1000 face value,five years to maturity and 6.3% annual coupon payments

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Definitions:

Generates Revenue

Activities or processes that result in the earning of income for a business through the sale of goods or services.

Incurs Costs

To undergo or suffer expenses during the execution of activities or operations.

Profit Center

A business segment or department within an organization that is responsible for generating its own revenue and thereby directly impacting profitability.

Responsibility Center

A department or unit within an organization that is accountable for specific activities and performance, with its performance measured against planned objectives.