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What Is the Rate of Return for an Investor Who

Question 39

Multiple Choice

What is the rate of return for an investor who pays $1,054.47 for a three-year bond with a 7 percent coupon and sells the bond one year later for $1,037.19?


A) 5.00 percent
B) 5.33 percent
C) 6.46 percent
D) 7.00 percent Rate of Return = ($70.00 - $17.28) /$1,054.47
= $52.72/$1,054.47

Correct Answer:

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