What Is the Expected Rate of Return on a Bond

question 28

Multiple Choice

What is the expected rate of return on a bond that matures in 5 years,has a par value of $1,000,a coupon rate of 11.5%,and is currently selling for $982? Assume annual coupon payments.

• A) 12.5%
• B) 12.0%
• C) 12.7%
• D) 13.4%

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Definitions:

Latent Need

A customer's unrecognised or subconscious need that has not yet been identified or addressed by companies.

Critical Needs

Fundamental requirements identified by customers that must be addressed by a product or service for it to be considered viable and satisfactory.

Market Orientation

A business approach that prioritizes identifying and meeting the needs and wants of customers through product innovation and customer service.