The yield on a perpetuity bond that has an interest payment of $60 and a price of $1,200 is
A) 5%.
B) 6%.
C) 12%.
D) 25%.

Name: The yield on a perpetuity bond that has an interest payment of $60 and a price of $1,200 is A) 5%. B) 6%. C) 12%. D) 25%.
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Question

Quizplus · Accepted Answer

The yield on a perpetuity bond is calculated as the annual interest payment divided by the bond price. 
In this case, the annual interest payment is $60 and the bond price is $1,200. 
Therefore, the yield is:
$60 / $1,200 = 0.05 or 5%

The Yield on a Perpetuity Bond That Has an Interest