You purchased an annual interest coupon bond one year ago that had nine years remaining to maturity at that time. The coupon interest rate was 10%, and the par value was $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the yield to maturity continued to be 8%, your annual total rate of return on holding the bond for that year would have been
A) 8.00%.
B) 7.82%.
C) 7.00%.
D) 11.95%.
E) None of the options are correct.
Correct Answer:
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A) effectively
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