The Yield-To-Maturity on a Default-Free, Similar Bond Is 6

question 53

Multiple Choice

The yield-to-maturity on a default-free, similar bond is 6%. If there is a risk premium of 3% and a default premium of 2% on the bond, the promised yield-to-maturity is

• A) 11%.
• B) 8%.
• C) 4%.
• D) 9%.

---

Definitions:

Product Costs

The total expenses involved in manufacturing a product, including direct labor, direct materials, and manufacturing overhead.

Revenue

The total amount of money generated from the sale of goods or services before any expenses are subtracted.

Production Supervisor

An individual responsible for overseeing the daily operations of manufacturing plants and ensuring that production targets are met efficiently and safely.

Prime Cost

The total cost of direct materials and direct labor incurred in producing goods.