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You Buy a 12-Year 10 Percent Annual Coupon Bond at Par

Question 14

Multiple Choice

You buy a 12-year 10 percent annual coupon bond at par value, $1,000. You sell the bond three years later for $1,100. What is your rate of return over this three-year period?


A) 40 percent
B) 10 percent
C) 20 percent
D) 30 percent

Correct Answer:

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