What is the rate of return on a bond with a coupon of $55 that was purchased for $900 and sold one year later for $950?
A) 5.56%
B) 6.11%
C) 11.67%
D) 12.43%

Question

Quizplus · Accepted Answer

The rate of return on the bond can be calculated by adding the coupon received to the difference in the sale and purchase price, then dividing by the purchase price. This gives: (55 + (950 - 900)) / 900 = 105 / 900 = 11.67%.

What Is the Rate of Return on a Bond with a Coupon