What is the total return to an investor who buys a bond for $1,100 when the bond has a 9% coupon and 5 years until maturity, then sells the bond after 1 year for $1,085?
A) 6.82%
B) 6.91%
C) 7.64%
D)9.00%

Name: What is the total return to an investor who buys a bond for $1,100 when the bond has a 9% coupon and 5 years until maturity, then sells the bond after 1 year for $1,085? A) 6.82% B) 6.91% C) 7.64% D)9.00%
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Question

Quizplus · Accepted Answer

Total return = [$1,085 + (.09 × $1,000) - $1,100]/$1,100 = .0682, or 6.82%

What Is the Total Return to an Investor Who Buys