An investor buys a five-year, 9 percent coupon bond for $975, holds it for one year and then sells the bond for $985.What was the investor's rate of return?

Name: An investor buys a five-year, 9 percent coupon bond for $975, holds it for one year and then sells the bond for $985.What was the investor's rate of return?
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The investor receives $90 in coupon payments and gains $10 from selling the bond. The total return is $100. The rate of return is ($100/$975) * 100 = 10.26 percent.

An Investor Buys a Five-Year, 9 Percent Coupon Bond for $975