The yield to maturity on a consol bond that pays $100 yearly and sells for $500 is
A) 5 percent.
B) 10 percent.
C) 12.5 percent.
D) 20 percent.
E) 25 percent.

Name: The yield to maturity on a consol bond that pays $100 yearly and sells for $500 is A) 5 percent. B) 10 percent. C) 12.5 percent. D) 20 percent. E) 25 percent.
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Question

Quizplus · Accepted Answer

The yield to maturity (YTM) for a consol bond is calculated as the annual payment divided by the price of the bond. Here, $100 / $500 = 0.20 or 20 percent.

The Yield to Maturity on a Consol Bond That Pays