What Is the Yield to Maturity of a Ten-Year,$1000 Bond

question 80

Multiple Choice

What is the yield to maturity of a ten-year,$1000 bond with a 5.2% coupon rate and semi-annual coupons if this bond is currently trading for a price of $884?

• A)5.02%
• B)6.23%
• C)6.82%
• D)12.46%
• E)5.20%

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Definitions:

Equity Method

An accounting technique used for recording investments in associate companies where the investment is initially recorded at cost and adjusted thereafter for the post-acquisition change in the investor's share of net assets of the investee.

Stock Investments-Long

Investments in stock securities intended to be held for a long-term period for capital appreciation, dividend income, or both.

Common Stock

Equity securities representing ownership in a company, entitling holders to vote and share in the company's profits.

Net Income

The financial term for the total earnings or profit of a company after all expenses and taxes have been subtracted from total revenue.