What Is the Total Return to an Investor Who Buys

question 88

Multiple Choice

What is the total return to an investor who buys a bond for $1,100 when the bond has a 9% coupon and 5 years until maturity, then sells the bond after 1 year for $1,085?

• A) 6.82%
• B) 6.91%
• C) 7.64%
• D)9.00%

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Definitions:

Extraverted/neurotic

Personality traits where extraversion is characterized by being outgoing and social, whereas neuroticism involves a tendency toward emotional instability and anxiety.

Introverted/stable

Personality trait referring to individuals who are inward-turning, preferring solitary activities, and emotionally resilient or consistent.

Neuroticism

A personality trait characterized by sadness, moodiness, and emotional instability.

Reciprocal

Pertaining to a mutual relationship or action where two or more parties give and receive something in turn.