Question
A $10,000, 8 percent coupon bond that sells for $10,000 has a yield to maturity of A) 8 percent. B) 10 percent. C) 12 percent.
A $10,000, 8 percent coupon bond that sells for $10,000 has a yield to maturity of
A) 8 percent. B) 10 percent. C) 12 percent. D) 14 percent.
Which of the following $1,000 face value securities has the highest yield to maturity?
A) A 5 percent coupon bond selling for $1,000
B) A 10 percent coupon bond selling for $1,000
C) A 12 percent coupon bond selling for $1,000
D) A 12 percent coupon bond selling for $1,100
If a $10,000 face value discount bond maturing in one year is selling for $8,000, then its yield to maturity is
A) 10 percent. B) 20 percent. C) 25 percent. D) 40 percent.
In which of the following situations would you prefer to be making a loan?
A) The interest rate is 9 percent and the expected inflation rate is 7 percent.
B) The interest rate is 4 percent and the expected inflation rate is 1 percent.
C) The interest rate is 13 percent and the expected inflation rate is 15 percent.
D) The interest rate is 25 percent and the expected inflation rate is 50 percent.
Please provide the explanation, thank you so much.
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