Suppose that the rate of return for a particular bond is 8%.If $50 is the coupon interest and $975 is the price paid for the bond.What is the change in the bond price?

Question

Quizplus · Accepted Answer

The rate of return is calculated as (Coupon Interest + Change in Price) / Initial Price. Given the rate of return is 8%, we can set up the equation: (50 + Change in Price) / 975 = 0.08. Solving for the change in price gives $28.

Suppose That the Rate of Return for a Particular Bond