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

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 25
Topic #: 1

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?

AST will benefit from the tax relief on the interest payment.

BThe debentures will be redeemed at a discount to their par value.

CThe debentures will be redeemed at their par value.

DThe market value of the debentures must be higher than their par value.

Show Suggested Answer

Suggested Answer: B

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

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Malcolm

4 months ago

Tax relief could also play a role in this situation!

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Stephanie

4 months ago

Wait, how can the market value be higher if they can't be traded?

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Beata

4 months ago

Definitely agree with that! Par value makes sense here.

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Aracelis

4 months ago

I think it's because they redeem at par value.

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Michel

5 months ago

The coupon is 7%, but the yield is only 5%. That's odd.

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Stephane

5 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

5 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.

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Tasia

5 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

5 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.

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