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CIMAPRA19-F02-1 Exam - Topic 1 Question 25 Discussion

ST has in issue unquoted 7% debentures which were issued at par and are redeemable in 1 year'stime. These debentures cannot be traded. The yield to maturity on these debentures has been calculated at 5%.Which of the following would explain why the yield to maturity is lower than the coupon?
B) The debentures will be redeemed at a discount to their par value.
A) ST will benefit from the tax relief on the interest payment.
C) The debentures will be redeemed at their par value.
D) The market value of the debentures must be higher than their par value.

CIMAPRA19-F02-1 Exam - Topic 1 Question 25 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 25
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

ST has in issue unquoted 7% debentures which were issued at par and are redeemable in 1 year'stime. These debentures cannot be traded. The yield to maturity on these debentures has been calculated at 5%.

Which of the following would explain why the yield to maturity is lower than the coupon?

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Suggested Answer: B

by Lorrie at May 03, 2022, 04:38 PM

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Malcolm
9 months ago
Tax relief could also play a role in this situation!
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Stephanie
9 months ago
Wait, how can the market value be higher if they can't be traded?
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Beata
9 months ago
Definitely agree with that! Par value makes sense here.
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Aracelis
9 months ago
I think it's because they redeem at par value.
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Michel
9 months ago
The coupon is 7%, but the yield is only 5%. That's odd.
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Stephane
10 months ago
This seems like a straightforward question about the importance of call management. I'll need to think through the options carefully to determine the best answer.
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Tabetha
10 months ago
The key is to focus on the core objects used in any Salesforce implementation. For B2B Commerce, I'd say the obvious choices are Product, Account, and Order. That's my strategy for this type of question.
upvoted 0 times
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Tasia
10 months ago
Alright, let me break this down step-by-step. The question is asking about who prepares and submits security status reports, so I need to think about the duties of each role listed.
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Tish
10 months ago
Hmm, I'm not entirely sure about this. I know WPA2 is a security protocol, but I'm not familiar with the specifics of the Wireless LAN Controller GUI. I'll have to think this through carefully.
upvoted 0 times
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