An Investor Purchased an NCD a Year Ago in the Secondary

question 26

Multiple Choice

An investor purchased an NCD a year ago in the secondary market for $980,000. She redeems it today and receives $1,000,000. She also receives interest of $30,000. The investor's annualized yield on this investment is

• A)2.0 percent.
• B)5.10 percent.
• C)5.00 percent.
• D)2.04 percent.

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Definitions:

Unemployment Rate

The percentage of the labor population that is job-free but in active pursuit of employment.

Labor-Force Participation Rate

The portion of the working-age population that is engaged in or seeking employment, including both employed and unemployed individuals.

Unemployment Rate

The percentage of people in the labor pool who are without employment and are actively hunting for jobs.

Labor-Force Participation Rate

The percentage of the working-age population that is in the labor force, including both employed and unemployed individuals.