Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions

Finra Exam Series-7 Topic 5 Question 80 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 80
Topic #: 5
[All Series-7 Questions]

Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85 . What is the nominal yield?

Show Suggested Answer Hide Answer
Suggested Answer: B

deductions from gross income to offset lower value of equipment. Depreciation is the deduction of costs for capital assets as their value declines.


Contribute your Thoughts:

Pamella
14 days ago
Haha, Yoko's got a point. Maybe the real answer is D) cannot be determined, because we don't know the actual coupon rate of the bond. For all we know, it could be 6% and the market price is just really low for some reason.
upvoted 0 times
Jina
3 days ago
I think you're right, D) cannot be determined seems like the most logical choice.
upvoted 0 times
...
Hyun
6 days ago
I think you're right, D) cannot be determined seems like the most logical choice.
upvoted 0 times
...
...
Yoko
15 days ago
Wait, this is a trick question! Since I'm the one who bought the bond, the answer should be C) 5.00%. Why would I buy a bond with a higher yield than the coupon rate? That doesn't make any sense.
upvoted 0 times
...
Nieves
19 days ago
I'm pretty sure the answer is A) 5.88%. The nominal yield should be the coupon rate divided by the market price, which in this case is 5% / 0.85 = 5.88%.
upvoted 0 times
...
Rodolfo
26 days ago
Okay, let's think this through step-by-step. The bond is trading at a market price of 85, which means it's priced at a discount. The nominal yield should be higher than the coupon rate to account for the discount.
upvoted 0 times
Dominga
6 days ago
B) 5.1%
upvoted 0 times
...
Emelda
10 days ago
A) 5.88%
upvoted 0 times
...
...
Tish
28 days ago
I'm not sure, but I think it's C) 5.00%
upvoted 0 times
...
Rutha
1 months ago
I agree with Stefany, because the nominal yield is calculated by dividing the annual interest payment by the market price
upvoted 0 times
...
Stefany
1 months ago
I think the answer is A) 5.88%
upvoted 0 times
...

Save Cancel
az-700  pass4success  az-104  200-301  200-201  cissp  350-401  350-201  350-501  350-601  350-801  350-901  az-720  az-305  pl-300  

Warning: Cannot modify header information - headers already sent by (output started at /pass.php:70) in /pass.php on line 77