An Investor Buys a 10-Year $1,000, 7% Coupon Bond for $1,050

question 54

Multiple Choice

An investor buys a 10-year $1,000, 7% coupon bond for $1,050, holds it for 1 year, and then sells it for $1,040.What was the investor's rate of return?

• A)5.71%
• B)6.00%
• C)6.67%
• D)7.00%

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Definitions:

Nitrobenzene

An organic compound consisting of a benzene ring substituted with a nitro group (-NO2), used in the synthesis of aniline.

Anisole

An organic compound, specifically an ether, derived from methoxybenzene, used in perfume and pharmaceuticals.

Chlorobenzene

An aromatic organic compound with a chlorine atom substituting one hydrogen atom in benzene, used in the production of pesticides and industrial solvents.

Electrophilic Aromatic Substitution

Electrophilic aromatic substitution is a type of organic reaction in which an electrophile replaces a hydrogen atom in an aromatic ring, forming a new substituent on the ring.