Calculate the Expected Return on a $6,000 Bond That Pays

question 119

Multiple Choice

Calculate the expected return on a $6,000 bond that pays 6 percent of face value and whose price has a 30-percent chance of falling by $1,000 and a 70-percent chance of rising by $1,000.

• A)$360
• B)-$760
• C)$650
• D)$950
• E)-$40

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Definitions:

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