The CFA Institute total rate of return on a two-year bond investment with an original cost of $900, coupon of 6%, and a final maturity value of $1000?
A) 22%
B) 24%
C) 12%
D) 11%

Question

Quizplus · Accepted Answer

The total return includes the coupon payments and the capital gain. The bond pays $60 annually in coupons for two years, totaling $120. The capital gain is $100 ($1000 - $900). Total return is ($120 + $100) / $900 = 24%.

The CFA Institute Total Rate of Return on a Two-Year