You Are Considering the Purchase of Hytec Bonds That Were

question 83

Multiple Choice

You are considering the purchase of Hytec bonds that were issued 14 years ago. When the bonds were originally sold, they had a 30-year maturity and a 14.375% coupon interest rate that is payable semiannually. The bond is currently selling for $1,508.72. What is the yield to maturity on the bonds?

• A) 8.50%
• B) 14.38%
• C) 11.11%
• D) 7.67%

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Definitions:

UCC

The Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.

Goods

Objects or materials that are produced for sale or exchange in the market, generally physical and tangible in nature.

Duress

A situation where a person performs an act as a result of violence, threat, or other pressure against them.

Rescission

The revocation, cancellation, or repeal of a contract, returning the parties involved to their positions before the contract was made.