A Three Month, 10% Note for $8,000, Dated April 15

question 66

Multiple Choice

A three month, 10% note for $8,000, dated April 15, is received from a customer. The principal of the note is:

• A) $200.
• B) $8,000.
• C) $8,200.
• D) $8,800.

---

Definitions:

10 ½% Bond

A bond that pays an annual interest rate of ten and a half percent of its face value.

Yield To Maturity

The total return anticipated on a bond if it is held until its maturity date.

8 ½% Bond

A bond that pays an annual interest rate of 8.5% on its face value.

Current Yield

The annual income (interest or dividends) divided by the current price of the security, typically used for bonds.