Consider a 15 Percent, 20-Year Bond That Pays Interest Annually

question 22

Multiple Choice

Consider a 15 percent, 20-year bond that pays interest annually, and its current price is $850. What is the promised yield to maturity?

• A) 10.23 percent
• B) 18.45 percent
• C) 2.31 percent
• D) 17.77 percent
• E) 9.26 percent

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Definitions:

Punishment

An adverse event or outcome that decreases the likelihood of a behavior being repeated in the future.

Operant Conditioning

Learning resulting from the response an organism receives following a behavior.

Negative Reinforcement

A form of conditioning where a response is strengthened by stopping, removing, or avoiding a negative outcome or aversive stimulus.

Law Of Effect

A principle in psychology that behaviors followed by positive outcomes are likely to be repeated, while those followed by negative outcomes are less likely to be repeated.