An Investor Buys a Five-Year, 9 Percent Coupon Bond for $975

question 104

Multiple Choice

An investor buys a five-year, 9 percent coupon bond for $975, holds it for one year and then sells the bond for $985.What was the investor's rate of return?

• A)9.00 percent
• B)9.23 percent
• C)9.65 percent
• D)10.26 percent

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Definitions:

Opium

Substance derived from the opium poppy from which all narcotic drugs are derived.

Narcotics

Drugs that relieve pain and induce sleep, often used medically for pain relief, but can be subject to misuse and addiction.

Psychoactive Drugs

Substances that affect the mind, altering mood, perception, or brain function.

Perception

The process by which individuals organize and interpret sensory information to form a meaningful picture of the world.