You purchased a 6% annual coupon bond at par and sold it one year later for $1,015.16. What was your rate of return on this investment if the face value at maturity was $1,000?

Name: You purchased a 6% annual coupon bond at par and sold it one year later for $1,015.16. What was your rate of return on this investment if the face value at maturity was $1,000?
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Question

Quizplus · Accepted Answer

Rate of return = [$1,015.16 + (.06 × $1,000) - $1,000]/$1,000 = .0752, or 7.52%

You Purchased a 6% Annual Coupon Bond at Par and Sold