Finra Exam Series-7 Topic 5 Question 80 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 80
Topic #: 5

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

A5.88%

B5.1%

C5.00%

Dcannot be determined

Show Suggested 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.

by Daniel at Jan 24, 2024, 03:20 PM

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Rodolfo

5 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.

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Tish

7 days ago

I'm not sure, but I think it's C) 5.00%

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Rutha

12 days ago

I agree with Stefany, because the nominal yield is calculated by dividing the annual interest payment by the market price

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Stefany

17 days ago

I think the answer is A) 5.88%

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