If the Yield to Maturity of All of the Following

question 93

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% semi-annual coupon payments
• B)a bond with a $500 face value, 10 years to maturity and 5.2% annual coupon payments
• C)a bond with a $1 000 face value, five years to maturity and 6.3% annual coupon payments
• D)a bond with a $5 000 face value, several years to maturity and 5.5% annual coupon payments

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Definitions:

Classical View

A traditional perspective or theory in a specific field that has stood the test of time and forms the foundation for subsequent developments.

Triangle

A polygon with three edges and three vertices, representing the simplest form of a polygonal shape.

Bachelor

A man who has never been married; or a university degree traditionally awarded after completing undergraduate studies.

Game

A structured form of play, often undertaken for entertainment or fun, and sometimes used as an educational tool.