A bond that is currently selling at $1,000 offers to pay $50 annually. What is the percentage rate of return on the bond?

Name: A bond that is currently selling at $1,000 offers to pay $50 annually. What is the percentage rate of return on the bond?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

To calculate the rate of return on a bond, divide the annual interest payment ($50) by the current selling price ($1,000) and multiply by 100 to get a percentage. 
Rate of return = ($50/$1,000) x 100 = 5 percent

A Bond That Is Currently Selling at $1,000 Offers to Pay