If a one-year bond with a face value of $1,000 is sold for $950, what is the bond's approximate yield?
A) 1.05%
B) 5.26%
C) 9.5%
D) 95%

Name: If a one-year bond with a face value of $1,000 is sold for $950, what is the bond's approximate yield? A) 1.05% B) 5.26% C) 9.5% D) 95%
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Question

Quizplus · Accepted Answer

The bond's yield is calculated as (Face Value - Purchase Price) / Purchase Price. Here, it is ($1,000 - $950) / $950 = $50 / $950 ≈ 5.26%.

If a One-Year Bond with a Face Value of $1,000