What is the rate of return for an investor who pays $1,054.47 for a 3-year bond with a coupon rate of 6.5% and sells the bond 1 year later for $1,037.19?

Name: What is the rate of return for an investor who pays $1,054.47 for a 3-year bond with a coupon rate of 6.5% and sells the bond 1 year later for $1,037.19?
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Question

Quizplus · Accepted Answer

The correct answer is A because the rate of return is calculated as (1037.19-1054.47+65)/1054.47*100 = 4.53%.

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