What Is the Approximate Yield to Maturity for a $1,000

question 45

Multiple Choice

What is the approximate yield to maturity for a $1,000 par value bond selling for $1,120 that matures in 6 years and pays 12 percent interest annually?

• A) 8.5 percent
• B) 9.4 percent
• C) 12.0 percent
• D) 13.2 percent

---

Definitions:

Break-Even Point

The point at which total costs match total earnings from production or sales, leading to neither a profit nor a loss.

Maintenance Costs

The expenses incurred to keep an asset in working condition or restore it to proper operation.

Least-Squares Regression

A statistical method used to determine the line of best fit by minimizing the sum of the squares of the differences between observed values and those predicted by a linear function.

Machine-Hours

A measure of production time, calculating the total hours a machine is operated within a specific period.