Which of the following is the yield of a bond that offers a risk-free rate of 4 percent and a risk premium of 2 percent?
A)2%
B)8%
C)12%
D)6%
E)9%

Name: Which of the following is the yield of a bond that offers a risk-free rate of 4 percent and a risk premium of 2 percent? A)2% B)8% C)12% D)6% E)9%
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Question

Quizplus · Accepted Answer

The yield of a bond is calculated by adding the risk-free rate to the risk premium. Therefore, 4% (risk-free rate) + 2% (risk premium) = 6%.

Which of the Following Is the Yield of a Bond